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Discuss the extent to which the economic theories in the Market's Reader can be applied to the "New Economy".

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Introduction

Q1-Discuss the extent to which the economic theories in the Market's Reader can be applied to the "New Economy". In this part of the question, I will describe the old and new Economy, after that I will point out the main characters of New Economy and what is different between NEW and Old Economy. later than, I will discuss the demand of knowledge, ideas, innovation, and individual creative destruction, change in market and competitive as the main resource needed to make economic prosperity. I will discuss Innovation reduce costs and improve product quality and how advances technology achieve the cost reduction and reserve the economic scale in good level. Finally I will apply the Economic theories in market reader. From around 1938 to 1974, the economy was built on a manufacturing base geared in the direction of standardized production (It was manual labor). It was organized into stable, hierarchical and generally high-handed organizations. These organizations achieved a competitive edge in the market by making standardized products faster and more economically. They focused on incremental cost reductions and a national marketplace. In addition, that how this organization success and achieved there ogles in most courtiers, for example textile and steel industry. That kind of economic start to collapse during the mid-70s and the early 90s. The crisis included both textiles and steel industry, in a period of changeover from the old economic to the new economic ,a lot of countries loss their competitive frame because others were changing the production process more faster and cheaper. The cheap labor which had brought industries to the South Asia was being very cheap. At the same time, the social demand for the individual has change, workers become looking for a higher standard of living, new cars, washing machines, clothes and bigger houses, which effect the economy. On the other hand, the new economy is rising as a demand of knowledge and idea-based economy. ...read more.

Middle

1- THE COMMON PROPERTY A common property resource is one that rivalries but non-excludable which main that on one has exclusive property right to it, and it can be used by anyone. No one owns the ocean's fishes until he caught it as example, the world's international fishing area are common property for all fisherman, if by taking more fish one fisherman reduce the catch of other one, he dose not caught this as a cost although it is cost to society . The result has been called (the tragedy of common), the tendency for commonly held property to be overexploited, often to the extent of distraction. It is socially optimal to add to a fleet that is fishing any give fishing area until the last boat increases the (value of the fleet's total catch) by as much as it cost to operate the boat. This is the sizes of fishing fleet, that a social planner would choose as one of solution to the common property problem that government should take it to prevent the market failure .in that circumstance is to agree on the optimal level of use, and the police foe this resource to reduce it by use as fishing quotas and hunting licensees. The government should enforce restriction and they have to be some regulation to control the number of fish cough in the high seas. For example, the Eurobond union has a common fishing police covering the Atlantic territorial waters of it market countries. Since 1983, total allowable catches for all main species have been set annually and divided up into catch quotas for each member country, and that is one of the tools that governments can use to prevent the market failure. 2- EXTERANLITIES It's cost or benefits of transaction that are incurred or received by other members of the society, but not taken into a account by parties to transaction. ...read more.

Conclusion

Its corporate management is currently expected to propel the company to greater heights. The presence of big names in Kodak tells us that the company's future is promising. Development, and success not only within the organization but also with its external environment (stockholders in this case). First, it must give more emphasis on its core business, the traditional silver-halide imaging business. This move is in consonance with the fact that traditional imaging is the identifier of the company in the market. Through it, Kodak has grown into a big company with the unique resources capable of developing or enhancing silver-halide-based products. With the fact ascertained that the market of silver-halide products is in a mature stage, the company must exploit new and untapped markets such as China, Hong Kong and Taiwan among others. Enforcing its brand reputation through extensive carefully devised advertising campaign and proper positioning of products would advance the company in penetrating into these markets. Venturing into this untapped market would also present Kodak with various opportunities. Among others, achieving economies of scope is evident. In China for example, where labor is at a low-cost, the company can produce products at a low cost. Through this, the company would be able to compete more intensely with its close rivals Fuji, Agfa, and Konica whose advantage over Kodak is brought by its less-priced products. In addition, the company may also be able to achieve bigger profit margin as a result of low production cost brought by economies of scope. The latter proposition, if undertaken by Kodak effectively, would increase the company's share in the international market, which at the moment is at a close proximity with its major competitor who is just behind by just 2%. However, the company must not be complacent with its dominance in the American market and remain focused in its venture in foreign markets. It must be remembered that foreign competitors are at an aggressive state to capture the American market. This is clearly presented with Fuji cutting Kodak's market share by 10% and Agfa's film giveaways. ?? ?? ?? ?? ...read more.

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