Business Economics Essay

Table of Contents1.INTRODUCTION2.MAIN BODY2.1THE NATURE OF RESOURCE COST bodily structure AND THE PRACTICAL consequence OF DIFFERENT COSTS 2.2 THE FACTORS INFLUENCING OPTIMUM SIZE AND THE SIGNIFICANCE OF DEMAND AND SUPPLY RELATIONSHIPS 2.3UNDERSTANDING OF THE RELEVANCE AND LIMITATIONS OF ECONOMIC THEORY TO MANAGE DECISIONS 3.CONCLUSION1.INTRODUCTIONFrom the stinting perspective, there are a full range of wants from individualists, firms and government hardly there is only a few number of resources or factors of payoff such as land, labour, capital and enterprise. The raw material will get it on from land, taking the example of oil, gas. The labour relates to the individuals able to work. The capital covers machinery, computers, offices or shops for retail people. Enterprise will engage all of these factors together and allow them to establish goods and services in order to make a profit. This individual floor will be identifying the nature of resource cost structure and the applicative significance of different cost. It will also explain the factors influencing optimum size and the significance of demand and generate alliances. It will finally demonstrate an sense of the relevance and limitations of economic theory to focusing decisions.2.MAIN BODY2.1 ECONOMIC aspect IN ORDER TO RUN THE COMPANY EFFICIENTLY Considering an example of throw up of creation of a manufacturing company based in the UK, the resources needed for the credit of the project will be established before the start of the project. perspicacious that any resource has a cost associate with it, identifying the resources needed, will ingest to work towards establishing all costs for the whole project. Resource can be visible or virtual, but the report will be enkindle in the physical resources as skills are manifested in people, who are physical entities. Three types of resources have to be considered People, materials and equipment. People can be skilled, semi-skilled and non -skilled. Materials, tactual items such as steel, concrete, lights, wood, cables, paint required by the project. Equipment, everything used to bring all the materials together, for example, cranes, welding sets, computing time, mobile offices. It is also important to have a go at it how much money committed to spend at any pinnacle in time.2.1.1The microeconomics perspectivesThis focuses on the market behaviour of individual consumers and firms to help earn the decision making process of firms and households. This is at a level of individual buyer and individual seller, meaning demand and cater. How much to produce and how much to charge for it. The law of the demand is that the demand decreases when the outlay increases and the demand increases when the price decreases.Also more demand of a wareion results in an increase of the price the price of that product. (See graph below).2.1.2The macroeconomics perspectives, focuses on the big picture of the bailiwick economy as a whole and provides a basic fellow feeling of how things work in the business environment. The macrocosmic policy goals will be achieved by the monetary policy and the fiscal policy. The monetary policy is the management of the nation money yield, the decision of the interest rate and the banking system to agitate economic growth, lower unemployment and inflation.2.2The factors influencing optimum size and the significance of demand and supply relationship The demand and the supply are two main concepts of the economy. bring is what measurement of product or service the buyers need at a certain time at a precise price. The supply is the quantity the market can offer at that same time and price. The relationship amid the quantity demanded and the price is the demand relationship and the relation between the supply and the price is the supply relationship. The price is a reflection of supply and demand.The law of demandWhen the price of a product goes up, the quantity demanded of that product goes down. On the other hand, when the price of a product goes down, thequantity demanded of that product goes up. The graph above shows that relationship between the demand and the price p1 higher, Q1 little than Q2 and Q3.The law of supplyUnlike the law of the demand, the law of supply shows that at a higher price the supply increases. The producers supply more at a higher price to increase their revenue. The relationship between supply and price is shown in the graph above at P3, price greater than P2 and P1, the corresponded quantity Q3 is greater than Q2 and Q1.2.2ECONOMICS THEORY TO IMPROVE THE RUNNING OF THE COMPANY2.3THE untaught OF EXPANSION OF THE COMPANY2.3.1Macroeconomic conditions of the country2.3.2 menstruum economic policy (fiscal and monetary)Report composing1. describe different aspects of business in order to run a company efficiently. Microeconomics and Macroeconomics perspectives 2.Explain using economics theory using real gentleman examples3. Company to be expanding internationally by opening a sweet manufacturing facility in a non-EU country a) Macroeconomic conditions of the countryb) Current economic policy (fiscal and monetary)