英国留学生课堂作业写作参考
发布时间：2016-12-02 07:53
作为一个正常的规则，价格上涨将导致需求曲线是根据法律的需求弹性需求量的减少。然而，助听器的需求曲线是向下倾斜而相对缺乏弹性的需求。
对这些存在听力问题的人，助听器是适当的必要性，但他们有时不能轻松地获得这一服务。医疗保险是由政府提供的保险计划但这不能补贴所有人民需要像年轻的人民无法从这有益，这会个人资产审核后批准。私人助听器保险公司然后将所需的人员的重要替代。
市场助听器供应商的过程中，很少的竞争对手可以输入作为消费者的范围限制在只有人民听觉有问题。同时，，提供助听器服务或生产助听器工具正在承受高成本，因为它需要同时保持质量和先进的技术和技能。自需要的性质，预期收益率将集中在一小部分消费者与听力问题。作为消费者不易理解的服务计划和产品，公司需要花高额的广告费来推广，但不能完全避免一些误解。这些公司不能指望大型销售带来的巨大回报。
The firm has to reserve profits to an acceptable level and they maximize the profit when the marginal revenue is same as marginal costs. Price in monopoly is determined by the demand based on the buyer's preference and need and it should be higher than the marginal cost. Both the government and the private insurers are not the price setter. Either the government or the insurers can uphold the price to achieve super profits. Although the firms will not proactively lower the price, there are new comers to join the market to approach potential customers by offering substitute services and products. Competition will force the firm to lower the price in order to strengthen their power in the market. However, this action cannot help the firm to increase the revenue as lower prices cannot help to reduce costs. As mentioned before, the demand is inelastic. No similar substitutes will be developed. Meanwhile, only mass production aligned with advanced technology and huge capital can lever the average costs. The firm also need to evaluate if the price reduction will be touch the balanced level or even lower than minimum average cost they can afford, if this is the case, the firm will face the crisis of closing down.
The firm can use their market power to execute the price discrimination in the market. The price of health aids is presenting the first degree of price discrimination as the firm is trying to set the maximum price equals to the price the consumer willing to pay. Without government subsidies and no high insurance coverage, people need to pay on themselves. But when price is reduced to the level exceeds the marginal cost, the output will be allocated inefficiently and so revenue will not be increased relatively. Unless the marginal cost is zero, the profit will then be maximized.
2. Evaluate different possible strategies that companies could implement to gain a sound position among their competitors in this hearing aids market. Use relevant theoretical concepts discussed in chapters.
Answer:
In the hearing aids market, the companies are mutual interdependent with each other to some extent. The companies are behaving in a strategical way as they will guess what the others think and behave first. Before making a decision on going to do, they will try to anticipate how their competitors will respond. In order to assure that they will not loss the market share or customers, they will consider the coordination so others will follow in a parallel form when one of them becomes the leader to set the changes. Entry barriers will be concretely built and market will not be opened with a long term planning in order to reduce the opportunity of new substitutes so they can enjoy long term profits. Owing to mutual interdependent, the companies have strong sense of self protection although they are not actually depending on others. The companies also will proceed slow innovation of new technology and narrow scope of promotion so let new comers not follow. Nevertheless, those companies will try to develop unique products or service plan in order to make their services to be differentiated with others so it can reduce the chance of substituting by others. For the pricing, the companies would set the price by higher than the marginal cost so they can reach the level when marginal revenue is same as the marginal cost as this is because only the long run profit is larger than zero, the companies can enjoy profit. For example, in the local oil suppliers, they played as the price setter as they can set price when they feel necessary for the increase, they mainly provide oil for the cars but they also will produce oil assembled products for daily use like gasoline or lubricating oils. In order to maintain their market share, very few companies can enter the market. The existing companies will react to the competitors' actions and then make necessary adjustments.
3. What economic conditions are relevant in managerial decision-making and how they are related with the typical types of risk faced by a firm?
Answer:
Business risks are the risks that the company are facing with no ideas about the business environment by full of uncertainty. These will be occur when there are some economical changes in the whole society or a specific industry, some actions held by the competitors, variation in technology or adjustment in the balance between cost and expenditures. Managers need to analyze the nature, degree and effect of the business risk before they make decision. These 3 points are being affected by the resource allocation, sales volume, preference changes, forecast, unit price, production costs, overall economic situation and government interference. If the managers take positive business risks they can generate profits. For example, the cost of development new LED light technology is very high and it is not easy to hire expert to complete the process as it involves high administrative and advertising costs, uncertain revenue return as people may not accept new technology, high maintenance cost for new products, etc. But once people accepts and find that the advantages of LED light such as fewer electricity will be cost and it reduces the harm to the eye, the light will become popular and then sales will be largely increased. Conversely, negative business risks such as a new luxury apartment was built in the area nearly the industrial area, people is not willing to live near the industrial area with smokes and noises as they think the sea view cannot compensate the bad effects to their health and foresee long term profits after resale, then the sale s of the building will not be optimistic. Some economic conditions will directly affect the decision making. If the resource is allocated in high productive area and can be obtained easily, the firm will be willing to take the risk as they do not need to spend high exploration cost to obtain the resource. If the resource is scarce, the manager needs to consider the opportunity cost and weigh the importance of confirming the decision by against the opportunity cost. They have to allocate these scarce resources and find the back up with alternatives. Due to limited resources, the managers have to decide whether they should produce the products on their own or just buy from outside. When the economy is progressive, the managers will consider producing the products on their own as they can fully control the sales plan and the quality, but high development cost will be involved so they may need to grant loan or debt to cover additional expenses and they need bear the responsibility on necessary repair work. If they buy from outside, they may can enjoy low price and repair coverage due to mass buying but the quality will be affected. While when economy is in recession, the consumer demand is reduced so the government will cut the taxes or lower the interest rate to simulate the economy. When the interest rate is low, loan can provide subsidy on capital for technology innovation or new development. But the managers also need to consider reducing the debt to offset the business risk. Through investigation in the overall economy, the managers can try to understand the impact on the future business environment.
4. Unions have generally bee far more successful in organizing and raising wages in skilled trades such as carpentry than in unskilled trades. Use the laws of derived demand toexplain why.
Answer:
The derived demand is one kind of economical demand which mean the demand for one specific good or service will lead to the occurrence of another demand for another good or service. For example, a farmer has to grow vegetable, he needs to use fertilizer to nourish the vegetable seeds. As he needs to sell the vegetables to earn income, so the need for fertilizer is increased relatively. Or such as one furniture company, the way to earn profit is to sell out the furniture. If this company is targeting to expand the business for profit maximizing, they need to raise the sale of furniture. Then, they would need more labor to produce more furniture to fit the sales. But they need is skilled labor instead of fresh graduates or unskilled labor which is looking for interesting job or pleasuring as skilled labor can help to raise the quality of the products and services and then the efficiency and productivity will be improved accordingly. This proves that the increase in supply will then lead to the increase in demand of factor of production. Then the cost of factor or production i.e. the wages of skilled labor will be increased and so the average cost for a firm will be increased. Conversely, if the furniture need is reduced, then the need for skilled labor is reduced accordingly. Another example of housing construction also can represent the derived demand for the skilled labor. For the unskilled labor, the productivity and efficiency of them is lower due to less concentration on work and lower incentive so may drag down the progress of the production as they need more time to learn and work. Moreover, the firm cannot receive a high return for the goods produced by the unskilled labor at a high price. Therefore, a derived demand is less successful in unskilled labor trades than skilled labor trades.
5. Critically analyze the importance of the factors that managers must consider in forecasting? Elaborate with examples on the prerequisites of a good forecast?
Answer:
There are some factors that managers need to consider for forecasting. Firstly, they need to understand the business cycle and adjust the business plan subject to the economic situation. This includes setting up a contingency plan for sudden economic recession. Secondly, managers have to study the change in customers' preference and the competitors' activities responding to the market change. Customers' preferences will affect the demand for the product and services, people change to buy substitutes will reduce the sales, managers need to decide to start profitable advertising activities. Meanwhile, when competitors develop new product in order to attract more customers, the managers should adopt necessary activities to minimize the loss of market share. These factors will directly affect the result after forecasting and the profit level of the company. A good forecast also must be accurate, meaningful, easy to use with a on time basis. The forecast cannot be out dated and in vague analysis otherwise this cannot reflect the true economic situation and cannot use to set up some strategies to maximize profit with lowest costs.
6. Analyze the effects of the law of diminishing returns to a modern-day business. Why this law is considered a short-run phenomenon? Use appropriate examples
Answer:
The law of diminishing returns states that the marginal return will be diminished when an additional variable unit of production cost is added into the production while other fixed production costs are remaining unchanged. Marginal product will increase when marginal cost is decreased. A simple example of running a vegetable plant can easily explain this law. Originally two farmers worked on the plant. After one farmer joined the working, the output has increased. Output was triply increased after another more farmer joined later. Then, more farmers wanted to join into the same plant as they saw the increased return and expect to share a part. However, the output was started to slow down after they worked as the plant was over fertilized and watered so the seeds cannot absorb excess nutrients and resulted in slowing their growth unexpectedly. Other examples are such as some training in sport or skill expertise. Over trained will hinder the progress instead. Karl Marx ever described this phenomenon is the expected profit rate is tended to fall. Unless the number of plant is increased, more space can accommodate more seeds and balance the average absorption area for the nutrients, and then the output will be increased faster. Therefore, this law is considered as a short run phenomenon as the return cannot be raised in long run and this is directly depending on the nature of the system. This law also can be applied on other modern cases such as companies want to boost up the sales by increasing the promotion and advertising. A short period can attract consumers' attention but after several months, this will become a habit or a common matter in people's life so the sales will be remained or increased very slowly. Similarly, when workers in one small café are increased, workers cannot work faster in a small working area and the customers also are not feeling comfortable in sitting there. As a result, the workers become not efficient enough as they cannot deliver the service to the customers immediately and this is really affecting the sales. No doubt sales will be increased by launching promotion, but above mentioned limitation will slow down the increase in profit. In order to maintain the increasing profit, the companies then need to start other strategies such as promotion campaign, launch exhibition, etc to re-collect buyer's purchasing will. Therefore, this rule can reflect a short term phenomenon but then the profit will increase in a decreasing rate.
7. Analyze with examples why the "kinked-demand curve" model of oligopoly represents a game theory approach to oligopolistic behavior.
Answer:
Traditional demand curve is set by some market powers such as monopoly which the marginal cost will be same as the marginal revenue, i.e. upward sloping marginal cost curve is intersecting with the downward sloping marginal revenue curve, in which more units are produced will cause to price reduction and producer will earn less profit. Traditional demand curve is a continuous curve as any change in marginal cost will reflect the adjustment in the price. While, in oligopoly market, inked-demand curve is an economic theory representing the behavior for Oligopoly. The demand curve in oligopoly market is a down sloping demand curve but is not a smooth, straight and continuous curve which has a "kink" in it. Kink is a break or a jump in the marginal revenue so the marginal revenue will suddenly have a stop and discontinue from the original line. In this kink curve, majority thinks the average cost is equal to the right price and so the marginal cost change will not lead to price adjustment.
Generally, the price is set in a stable level in oligopoly market and price competition is not the major competition between oligopolies. They may not follow others when one oligopoly reduces the price. The HDTV and petrol supplier are the examples of the oligopoly. They will not easily increase the price as they worry customers will move to the competitors. Under similar situation that they will lower price easily as they expect others will do the same so will also cause to customer loss. Unless there is a big increase in cost otherwise they will not easily adjust the output and price. Oligopolies are tending to stabilize the price as they think price increase will cause customer loss so they also do not incentive to change the price.
Normally, one firm can maximize the profit when marginal cost is equivalent to the marginal revenue. In oligopoly market, according to the kinked-demand curve, when the material cost is increased, it will lead to the shift of the marginal cost curve to the upper level. This action will make the price increased but the output will remain the same which the marginal revenue curve will discontinue so no additional profit will be earned.
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