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Market information based on a Petrol Organisation.

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Introduction

P5: An economy consists of a wide range of individual decision makers that tend to buy and sell goods, borrow and lend cash as well as raise taxes and changing the interest rates. The most influential decision makers for a business are the consumers and suppliers. The reason for this is because if the consumers stop purchasing products, then the suppliers would have to lower their prices; this also applies to companies who supply to other companies. The organisations, I have selected for this topic is the Jet Petrol station company. Stability: Stability exists when a business produces a forecast for the short and medium term, to identify the likelihood of the product being in demand. Stability also involves being able to organise deals under agreement that everything supplied will be paid for. Recession A recession takes place in the economy when people involved in business become more cautious and due to this, businesses have to cut back on certain costs due to a drop in the stock market because of the lack of demand. This occurs when negative impacts of recession occur in a business; some examples are listed below? 1. A business may not be able appoint many new staff members to avoid spending a large amount of cash from the business being spent on the staff wage/salaries, ordering goods that are high in cost effectiveness due to spending more cash in ordering the goods and earning less cash in return. ...read more.

Middle

Therefore according to Jet Petrol, this company will need to increase prices towards the products they sell, and because of this the business may lose a few customers due to the increase of prices. As some people may not be able to afford purchasing petrol for their cars if it is too expensive. 2. The owner of Jet Petrol may proceed towards making some of the employees redundant, as the recession has increased therefore the employees weekly/monthly wages are likely to have also been increase, so in order to cut down on costs the manager may consider on appointing a shortage number of staff. 3. Jet Petrol may need to cut down on a few costs, such as: performing a drop in their stock market as the sellers are likely to increase their prices due to recession. Therefore Jet petrol may have a certain budget at which they tend to spend towards ordering goods from the suppliers and according to an increase of VAT the new stock prices may have increasing and exceeded over the company?s budget limitations. 4. Jet Petrol may have to decrease certain prices for some of their products, because due to the recession situation taking place, the customers are likely to be cutting down on costs by saving money. So if Jet petrol would like to continue gaining customers and earning cash, they may need to consider on lowering the prices of their products. ...read more.

Conclusion

Therefore this shows that there is now a competition of prices going on between Jet petrol and other similar companies that provide the same type of service as they are all looking forward to continue surviving, by gaining customers and making a profit. However if a boom is taking place, then it is likely that there will be a decrease of competition in the economy, as companies such as Jet petrol will be likely to continue making a progress more efficiently, due to various different reasons, such as: being able to meet more consumer demands which can then leads towards an increase in the rate of products that are being sold, customers would have more cash due to the low rate of recession therefore they are likely to spend more than usual in their daily shopping, therefore many businesses will continue to gain new and regular customers. So there will be a decrease between the competition of one business and another. Affordability Affordability takes place when there is a decrease in price ranges, which then leads towards certain goods being sold to the consumers at a more affordable price. A business may use this as an advantage by selling goods which are demanded by the consumers and then selling those specific goods at a cheaper price, in order to increase their sales. ...read more.

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