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Microeconomics is a branch of economics that studies the behavior of individuals and firms in making decisions regarding the allocation of scarce resources. It focuses on the decisions of consumers, producers, and the interactions between them.
One important concept in microeconomics is supply and demand. The law of supply and demand states that the price of a product or service will adjust to balance the quantity supplied and the quantity demanded. If the quantity demanded for a product is greater than the quantity supplied, then the price will increase, causing producers to increase their supply and consumers to decrease their demand. Conversely, if the quantity supplied is greater than the quantity demanded, then the price will decrease, leading to an increase in demand and a decrease in supply.
Another important concept in microeconomics is elasticity, which measures the responsiveness of the quantity demanded or supplied to a change in price. If a change in price has a significant impact on the quantity demanded or supplied, then the product is said to have elastic demand or supply. If a change in price has a relatively small impact on the quantity demanded or supplied, then the product is said to have inelastic demand or supply.
Microeconomics also studies the concept of opportunity cost, which is the cost of a decision in terms of the next best alternative foregone. For example, if a person decides to spend their time and money going to a concert, the opportunity cost is the money they could have earned by working and the enjoyment they could have gained from doing something else.
In addition to studying consumer and producer behavior, microeconomics also examines market structures, including perfect competition, monopolistic competition, oligopoly, and monopoly. In a perfectly competitive market, there are many buyers and sellers, and the products being sold are homogeneous, meaning they are all the same. In this type of market, firms have no control over the price and must accept the market price. In a monopolistic market, there is only one seller, and the firm has complete control over the price. In an oligopoly, there are only a few sellers, and they must consider the actions of their competitors when making decisions.
Microeconomics is an important field of study because it helps us understand how individuals and firms make decisions and how these decisions impact the market. It is used to make business and policy decisions, such as setting prices and allocating resources. By understanding microeconomic principles, we can make informed decisions that can lead to more efficient and effective outcomes.
Microeconomic analysis Free Essays
In this industry, competition is at a high level, but companies remain afloat and continue to compete. These lower incomes would act as a diminished incentive for people to work. . Subsequently, price can be adjusted in consideration of the PED as discussed above, to allow them implement a pricing strategy for market penetration. Give an example of a microeconomic phenomenon and an example of a macroeconomic one.
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Some of the factors are: demand and supply, price mechanism, the analysis of production costs, the importance of market structure, trade and the competitiveness in the global economy. In such a structure, the ability of the company to influence the market is limited since there is lack of product differentiation. Netflix has reported that the amount of watching from the average subscriber has grown in every quarter after the fourth quarter since 2011. The table below simplified this demographic statistic in comparison to competitors; The table above illustrates that Netflix is a market leader in all population demographics, further explaining the success of their global brand. Monopoly implies that there is sole supplier of a good or service in the market who is a price setter and most often exploits its monopolistic power to derive excessive profits. In an oligopoly, there are a few companies that control the entire market.
As for the price of substitutes, the company has the upper hand since their subscription fees are lower and internet usage fairly competitive. . Thus, a change in the economic situation of the oil markets would also create a shock on. These firms offer alike services at a comparable price to Netflix This means that the amount of substitutes that can supply similar quality services as Netflix are few. When it comes to Netflix and its supply and demand conditions, you can see that they are also vulnerable to the same supply and demand stress as other business organizations. It is approximated that weekly, 265 million customers access 11,400 stores in 26 countries globally.
DBP411 — Community Planning Assignment 2 Community Planning Practice Paper What role does Community Planning have in Local Economic Development? The interaction and power of the forces of demand and supply determines the nature of the market. The impact of tariffs on consumption extends to the levels of investment in the economy. We have elucidated that despite the increase in market share and revenue, the company continues to be limited by high operating costs and overall expenses. Number of Netflix paying streaming subscribers in the United States from 3rd quarter 2011 to 3rd quarter 2019 in millions. . The matter worsens because all nations consume oil products at the expense of the only twelve nations producing crude oil. In this case, many consumers regard Netflix services as a necessary luxury as informed by social and lifestyle changes.
Business: The government is expected to respond and come to the aid of the people in case any disaster strikes. Netflix is constantly expanding the streaming list of content providers along with their competitors such as Hulu, Amazon Prime, HBO and other premium networks. . Indeed, the figure below highlights that in line with increased sales, revenue has continued to rise, as more and more consumers subscribe to their platform. As such, Netflix is not exempted from this system, which impacts their business model. This can be achieved through strategic marketing and market segmentation.
The most preferred economic system that is most suitable for handling different crisis with regard to their epic proportion is the mixed economic system Powell, 2007. Importantly, this was not always the cause as it was not until I entered the field of finance and consumer credit that I began to learn about, and understand important elements of macroeconomics, as well as the role and influence they had with the national and global economy. Despite the numerous firms that are currently in the online entertainment market, such as YouTube, they have managed to maintain competitive advantage. Sustainability By evaluating the findings above on price elasticity and demand trends, the firm can sustain its success in the future by ensuring it is primed to meet this level of demand. . The sovereign individual gets their identity from being.
Microeconomics Research Paper Examples That Really Inspire
The multinational company purchases more than 70 percent of its products in the US, hence being the product's biggest customer. Explain with a critical analysis of Amazon merging with UK companies. As time goes on, it is expected that consumers will change their spending habits to completely move away from cable and move directly to streaming services which would increase the elasticity of Netflix. Price discrimination can take three major forms, first degree price discrimination, second degree price discrimination and third degree price discrimination. You also have a lot of scope to present ideas and arguments with these topics.
The Construction Industry's Microeconomic Analysis
Example, some people like Apple, some people like Sony, Samsung, HP or …show more content… When prices are higher the demand decreases and the supply increases and vice versa. From 1930s till late 1950s, it. The multinational company operates three stores dealing with fresh produce, bakery, deli, and dairy products with electronics, apparel, toys, and home furnishings. This was a result of the populist government of the 1970s diversion of attention on redistribution as well as equity instead of growth Fosu, 2007. IT and Economic Performance: Evidence From Micro Studies CHAPTER V: IT AND ECONOMIC PERFORMANCE: EVIDENCE FROM MICRO DATA STUDIES By B. Based on the illustration shown herewith, UPS has a 25.
The price will decrease. As the world is evolving due to advanced technology and research, entities have embraced satellite-based mobile communication system due to its vast advantages especially in mining, broadcasting, recreational, education, health, emergency and. If Netflix can continue to understand the wants of the consumers, then they will remain leaders in their market. The stock and earnings of Netflix have proven to be growing at a steady rate over the last few years. Consumers makes consumption decisions and firms make production decisions. In relation to my definition, I will compare the development experience between Jamaica and Ghana extensively since 1960. Microeconomics studied a separate individual or individual households participating in economic relations.
. . How PED affects Netflixs pricing decisions There is a strong relationship that exists between revenue and PED. The high price of iMacs makes them less accessible and only a certain category of people can afford to buy. Thus he can buy more gas with the same budget and then he might want to buy more gas to travel more miles.