These types of conditions keep firms from monopolizing the market. The final regulation ensures awareness of organizational goals which provides insight regarding how organizations will react to different price levels. Regulations for the perfect competitive market directly correlate supply to marginal cost methods. Without these regulations for the competitive market the formal concept for supply will be obsolete. Insights from the
In the next chapter we learn how sellers set the prices in which we pay for an item, why things cost what they do and not what they are worth. The key to prices are sellers that can sell their products as close to the cost of making the item. In a regular market, prices are the key. Businesses cannot afford to charge a higher price, customers are normally looking for a lower price and the lower the better, in today’s economy. Many customers ask the question, “What affects prices?” We learn that things happen beyond the sellers’ and buyers’ control to raise and lower prices in today’s market.
M4–Analyse the reasons why costs need to be controlled to budget In this assignment I will analyse the reasons why costs need to be controlled to budge. If costs are not measured by Debenhams then their profits will be badly affected therefore budgeting is one process to regulate costs as it gives the organisation an approximation or a target on what their cost and revenue should be. A business has to budget and control expenditure in order to see what has been received and paid out, otherwise unrestrained spending could occur and decline could happen. One of the difficulties that could occur if costs are not controlled to budget is: high fixed cost per item which decreases businesses profit and ability to compete. Debenhams are very effective at controlling its costs to budget as the results were good for sales revenue throughout 2013.
They make their own prices, which would in most cases be more of a benefit to the producer. Both structures make it very difficult for others to enter the industry, limiting and sometimes blocking entry and competition. Industrial Regulation seeks to prevent unfair practices of restricting market entry, opening markets up for competition. Ideally, prices with regulate themselves in a fair competition, preventing one or a few companies from setting the prices that would be deemed as inappropriate. It also works to prevent the practices of unfair pricing and charging higher prices to consumers while the companies produce less product, limiting choices for consumers.
The contracting of the entire department or even a single task to an outside vendor translates to the turning over the management and control of the function to another company. Another reason to not outsource, is to avoid the additional possible security issues that comes with turning your information over to an outside vendor (Bucki, 2012). Risks Associated With Outsourcing When outsourcing to another company there are various risks that come with this process. One risk can come in the form of quality issues. The vendor will be function in effort to make a profit as is with all businesses.
Protectionism endanger a consumer’s right to choose from a wide variety of goods and services. The defense argument is that it protects higher prices, lower quality goods, economic stagnation and among other things. It is a form of purism when it comes to the trade barriers being in place. It is defended that is in place because consumers to purchasing foreign made products will cause unemployment here in America. The theory is that jobs are lost when we are tempted by cheap foreign goods.
According to Keynes, why might deflation create problems for an economy? ▪ In expectation of increased spending, too many entrepreneurs would begin businesses and most would fail. ▪ The cost of repricing goods would increase costs, and therefore reduce profits, for businesses and they would cut production. ▪ People would drop out of unions because unions would become ineffective at keeping wages of members high. ▪ Consumers might expect prices to fall further and cut back consumption now.
The price elasticity is important in business because it refers to the change in quantity demanded to the change in the price of a service or product. Elastic demand is a change in the price of the service or goods that can affect the demand. Will Bury product is different, and the success of his product can assume that the price can be elastic for his product. In the market, there are similar products that are available for different prices the lower the price may work out better in attracting new buyers. However, in Will Bury situation he may have to raise prices and sell more items to bring in more
Heather Moorehead M4 – Written Assignment 1.) Export capital for production abroad The exporting of capital for production would not be supported by a utilitarian and would be found to be unethical. A utilitarian would argue that by allowing our capital to be produced abroad we would be hurting ourselves domestically by giving up potential jobs to workers internationally and by limiting domestic usage. In today’s economy a company can set up production plants in virtually any country they want, and most tend to go where the cost of labor is least expensive. A utilitarian’s goal is to determine how to obtain “the greatest possible balance of good over bad for everyone effected by our actions” (Shaw & Barry, 2013).
If other things change, then one cannot directly apply supply/demand analysis. Sometimes supply and demand are interconnected, making it impossible to hold other things constant (Colander, The Limitation of Supply/Demand Analysis, 2010). “In supply/demand analysis, you would look at the effect that fall would have on workers’ decisions to supply labor, and on business’s decision to hire workers. However, there are also other effects (Colander, The Limitation of Supply/Demand Analysis, 2010). “For instance, the fall in the wage lowers people’s income and thereby reduces demand.