Micro Economics Coursework Assignment Sample

Name: Micro Economics Coursework Assignment Sample
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Table of Contents

Introduction
Question 1
Question 2
Equilibrium Framework
Question 3

Type Assignment
Downloads879
Pages9

Introduction

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Question 1

Demand creation of product

The demand for a product according to the supplier perspective, is created to gain consumers' demand and provide them services according to their needs. As per the opinion of Evans and French (2021), states factors for goods and services that includes expectation of demand in future and also substitutes of goods creates high demand in the market. However, the demand of consumers has been raised according to their comfort. Due to the low-quality product of shoes in the market does not provide satisfaction to consumers by which existing companies are not able to meet their requirements. According to supply and demand curve of a Pro shoes it had acquired consumer demand in the market

The demand for high quality shoes has been increasing and hence it has influenced the seller to create Air shoes. It is of high quality, which provides comfort and meets the customers' needs and satisfaction. The main reason for entering the new market is to gain market share and increase brand value that would help to gain competitive advantage in the current days (Watson 2021). Sellers enter a new market when the demand of a particular commodity increases but there is a lack of supply. Hence, to capture the market and increase revenue sellers usually enter the market and also to gain brand loyalty.

The demand and supply of consumers are created according to demand of particular products in the market. For example, Pro shoes have a high demand in the market as it is a very demanded shoe. The supply and demand of goods are higher as the market provides consumers according to their needs that creates demand for products in the market.

Main reason to enter in market

The main reason for the supplier to enter in the market is to gain high consumer demand and provide them with better quality products (Cakar and Çavu? 2021). Due to consumer demand for new products had created high demand according to their requirements. However, it would help the organization to meet consumer demand and provide them with satisfaction. This can be acquired to increase productivity and provide consumers as per their requirements. This would also help the organization to increase sales and gain demand for their products.

Demand for products can be secured on the basis of delivering goods and services to the consumers at a reasonable price and to acquire high demand. As per the opinion of Bisello (2021), states delivering goods and services according to the requirements of consumers would help to retain profit margin and also to create high demand on the market. This would also help to obtain and to provide services to the consumers. This provides organizational development on the market as it requires high demand and also needs to make consumers feel more satisfied. However, providing good quality products according to the needs of consumers would help to retain more demand as well as to obtain high revenues.

Question 2

Factors on demand and supply side that influence price of products

The factors that influence demand and supply of a product in the market include purchasing power of consumers of that particular product, and production cost. This also includes income of consumers as this is a key factor which influences the price of products. As per the opinion of Hofmann and Rutschmann (2018), states consumers income affects price of products as they are required to retain income from the market.

The factor of price according to demand side also consists of choice of consumers and their products preference. This includes the price of products and effects on the demand side of the products. However, availability of price and its substitutes also provides an effect on the demand side of the market. This is because they help to attract high consumer demand and to retain organizational development (Kruzmetra et al 2018). This influences products as they are required to retain profit margin and to develop high consumer demand.

Factors affecting supply

The factors that influence supply of products in the market consists of changing factor prices, fiscal policies (economicsdiscussion ,2022). Supply of products also influences technician progress in the organization and also helps to retain profit margin and helps to develop the organization to develop financial condition. However, changes in pricing factors also affect price and develop supply factors. The final changes on commodity of products increases supply of products and influence pricing strategies of the products. This effect on supply of products by increasing its product supply.

Equilibrium Framework

The equilibrium framework’s three components are Theory, Data, and Shocks and they are generally elements of the CGE study. CGE analysis is a numeric prediction of changes in economic factors. Low consumer income can change the demand which can affect supply in the market. Low demand can also reduce the price level of the product to maintain the demand and supply in the market (Wang et al. 2019). According to the Equilibrium framework, consumer income can increase or describe the price of the product. Other than that, consumer preference is also an important aspect of the price change.

Most consumers prefer brand value which increases the price level of the product. Low consumer preference can reduce the brand value of the company as well as product price. When the price of the goods that encourage products decreases, then the quality of the product decreased. On the contrary, when the price of compilation decreased, the price of goods increased (learn, 2022). When a buyer thinks or expects that the price of a product will increase then they buy the product and the demand for the product increases, which also increases the product price.

Question 3

Elasticity and Inelasticity of the Product

Elasticity is a microeconomic factor that is applied to every product and service in the world. Elasticity is related to the demand and supply, and the product value is greater than 1 or equal to 1, which suggests demand for services and goods. When a product's demand goes which and prices changes according to the demand, it will come under the product elasticity factor. The value 1 indicates that demand is significantly sensitive to the product price. Elasticity is mostly related to the quantity of demand, like Air shoes Air. Air shoes Air is the most popular and most demanded product among all Air shoe products. According to the latest shoe market share, all Air shoes are focusing on the price elasticity of demand. Air shoes are expensive and their starting price is $60 USD, although their demand was not decreased because of the pricing which suggests that Air shoes Air runs on the elasticity of the demand. Air shoes’ current net income is $5.7 billion USD and most of its product of Air shoes comes under price elasticity (Statista, 2022). However, price elasticity helps the company to increase its brand value, which works for Air shoes and its current brand value is $33,176 million USD.

However, there is a certain point that suggests that Air shoes have some inelasticity of price demand when it comes to brand loyalty. Some recent data shows that Air shoes have certain products that do not fulfill the current demand. For Example, Air shoes Walking was the product that did not match the customer's fulfillment and this particular product comes under price inelastic demand (Statista, 2022). Other than that, price inelasticity varies from country to country, and because of that reason, Air shoes lose their market share and demand in some Asian countries.

In the This case, the price is relatively elastic and changes in price and it is observed that with an increase in price the demand for product quantity decreases and with lowering the price it increases.

Ceteris Paribus regarding the company’s revenue

Ceteris Paribus is a Latin Economic factor that generally uses the phrase to stand for all the things constant and only two variables are changing. Catering Paribus shows the company’s two variables position when every aspect of the company remains the same (Azuh et al. 2021). During the Ceteris Paribus, when every aspect of the company remained the same and prices of the product increased, Nike faced a high supply of revenue. Nike’s revenue percentage has increased during the price increase and mostly because of the price elasticity demand model. Air shoes first-quarter sales revenue increased by 16% and the company has also increased its redirect sales margin by 28% during the price increase (Forbes, 20220. Demand and supply are related to the sales revenue of the company and it is the main reason for the high supply of revenue. Brand value also plays a significant role in the supply and demand factor. The Catering Paribus phase is only applicable during all other factors remain still the same.

Reference list

Imf, 2022 Supply and Demand: Why Markets Tick Available at: https://www.imf.org/external/pubs/ft/fandd/basics/suppdem.htm [Accessed on: 1st July,2022]

Evans, W.D. and French, J., 2021. Demand creation for COVID-19 vaccination: Overcoming vaccine hesitancy through social marketing. Vaccines, 9(4), p.319.

Available at: https://www.mdpi.com/2076-393X/9/4/319/pdf [Accessed on: 1st July,2022]

business-essay,2022 Price elasticity of Nike products Available at: https://business-essay.com/nike-and-adidas-products-price-and-income-elasticity/ [Accessed on: 1st July,2022]

Cakar, T. and Çavu?, B., 2021. Supplier selection process in dairy industry using fuzzy TOPSIS method. Operational Research in Engineering Sciences: Theory and Applications, 4(1), pp.82-98.

Available at: https://www.researchgate.net/profile/Tarik-Cakar/publication/350888859_Supplier_selection_process_in_dairy_industry_using_fuzzy_topsis_method/links/60abace0a6fdcc6d626dbba4/Supplier-selection-process-in-dairy-industry-using-fuzzy-topsis-method.pdf [Accessed on: 1st July,2022]

Watson, B.C., 2019. Creation of user demand surfaces to inform design decisions in novel scenarios (Doctoral dissertation, Georgia Institute of Technology).

Available at: https://smartech.gatech.edu/bitstream/handle/1853/62710/WATSON-THESIS-2019.pdf?sequence=1 [Accessed on: 1st July,2022]

Bisello, G., 2021. Starbucks and Illycaffé: different strategies to successfully enter the Chinese coffee market.

Available at: http://dspace.unive.it/bitstream/handle/10579/20350/861550-1257816.pdf?sequence=2 [Accessed on: 1st July,2022]

Hofmann, E. and Rutschmann, E., 2018. Big data analytics and demand forecasting in supply chains: a conceptual analysis. The International Journal of Logistics Management.

Available at: https://e-tarjome.com/storage/panel/fileuploads/2019-01-28/1548666561_E10504-e-tarjome.pdf [Accessed on: 1st July,2022]

Kruzmetra, M., Rivza, B. and Foris, D., 2018. Modernization of the demand and supply sides for gastronomic cultural heritage. Management Theory and Studies for Rural Business and Infrastructure Development, 40(3).

Available at: https://ejournals.vdu.lt/index.php/mtsrbid/article/download/114/105 [Accessed on: 1st July,2022]

economicsdiscussion ,2022 Factors which Affect the Changes of Supply Available at: https://www.economicsdiscussion.net/supply/7-factors-which-affect-the-changes-of-supply/1645 [Accessed on: 1st July,2022]

economicshelp,2022 Factors affecting Supply Available at: https://www.economicshelp.org/microessays/equilibrium/supply/ [Accessed on: 1st July,2022]