Lastly organizations must all seek the greatest profits meaning nothing else but profits. When these conditions are meet which isn’t often, organizations can supply goods following their own self-interests in a predictable manner to the market. Suppliers utilize the demand curve to determine the amount of productivity and the right cost for the market. The requirement that all the firms are large ensures no organizations will be able to gain more than another. These types of conditions keep firms from monopolizing the market.
Aliea McBooth Professor Ivan Vernon 09/06/2013 Perpetual Mercy Hospital Factual Summary Perpetual Mercy Hospital, a 600 bed hospital, has just started a Health Clinic within the downtown area. Perpetual Mercy Hospital is located in a suburban area that attracts younger families and they have just begun to offer a preferred provider organization service option. 70% of the clinics patients are female. Research revealed that there are approximately 12,000 people are likely to utilize services provided by the clinic and their expected frequency of illness or needed examination that could be provided by the downtown healthcare clinic is as follows. * 60 percent - One time every other year * 25 percent - One time per year * 10 percent - Twice per year * 5 percent - Three or more times per year Perpetual Mercy Hospital anticipates that this clinic will help optimize its services by 1.)
The substitution effect is the effect on the quantity of a good demanded by the consumer as a result of the relative price being different and this factor alone. In this case, the price of both black and white colour televisions fall, whilst the price of all other goods remain constant. This may lead to individuals being more inclined to spend money on consuming both black and white, and colour televisions as they are relatively cheaper than other goods. The income effect of a decrease in the price of the good is the effect on the quantity demanded due to the fact that the consumer’s real income has changed and that factor alone. In this particular case, the consumer’s real income has increased as a result of the fact that the price of both black and white televisions and coloured televisions have fallen.
The housing of all departments in one location offers both an advantage and disadvantage, but I would have to say that the disadvantage outweighs the advantage. The housing of all departments in one location brings down the profit margin and causes them to see a lesser profit. Since the competitors aren’t housing all departments in the same location they will see a larger profit. This also means that Albatross Anchor is unable to reduce their costs. An economy of scale is the reduction in long-run average and marginal costs arising from an increase in size of an operating unit.
This is because when taxes are increased a smaller amount of income is retained giving people the incentive to declare lower incomes to the HMRC so that they fall into a lower tax bracket. Moreover people may take incomes as a share option. This is because capital gains tax is at a flat rate of 18% therefore much lower that income tax allowing people to retain more of their incomes and enjoy better living standards. This will result in a reduction in the government’s tax revenue as people are paying less tax, which will lead to further increases in the deficits. Secondly high taxes create disincentives to work and this can be analysed through income and substitution effects.
On the other hand, the fall in consumption does heavily depend on where the fall is. If the fall in consumption is for domestic goods than this will have the reverse effect. The deficit will get worse as more money is being spent on imports in comparison to exports and so the the value of exports - imports will be much lower or a negative number. A fall in investment abroad will decrease the current account deficit because the difference between what you are spending money abroad on and what you are saving is not so far apart. Less investment abroad means that more money can be spent in the UK economy which greatly effects the current account.
Target’s performance was affected by the global financial crisis that hit the world during that time. The crisis caused a fall in GDP and massive unemployment. This affected the buying habits of customers who then preferred to buy from Wal-Mart due to their legacy as a low-cost discounting store. Wal-Mart, Target’s main competitor, was attracting more customers because of its low-cost selling strategy. Consumption patterns were all of a sudden frugal; this made Target lose many customers since it was perceived as a luxury store.
However, the company must be careful because a too big of a ratio can eventually lead to bankruptcy (Investopedia). The inventory turnover ratio for Nestlé is lower than Hershey’s because Nestlé either has lower sales or excess inventory. The total asset turnover for Hershey’s is also higher; this means that it is more efficient in using its assets in generating sales. As a result of a higher total asset turnover, the gross profit margin is lower than Nestlé’s (Investopedia). The return on assets and return on equity ratios are also better for Hershey’s because the company is making more money on less investment then Nestlé.
What you will learn in this Module: Module 8 Supply and Demand: Price Controls (Ceilings and Floors) Why Governments Control Prices You learned in Module 6 that a market moves to equilibrium—that is, the market price moves to the level at which the quantity supplied equals the quantity demanded. But this equilibrium price does not necessarily please either buyers or sellers. After all, buyers would always like to pay less if they could, and sometimes they can make a strong moral or political case that they should pay lower prices. For example, what if the equilibrium between supply and demand for apartments in a major city leads to rental rates that an average working person can’t afford? In that case, a government might well be under
Everyone would be taxed on what the consumer would buy. On the other hand the current income tax system taxes people based on how much money they make. The more they make the more they are taxed and vice versa. The fair tax, which is a comprehensive proposal, is a much better system than the income tax because it involves a flat rate which is transparent and simplistic. Since the fair tax would enact a flat tax that everyone pays equally, this would allow the taxing to be fair and transparent.