Price Discrimination Essay
Price Discrimination is the practice of charging different consumers a different price for the identical good or service for example charging children, university students and old aged pensioners lower prices than other cinemagoers. There are three types of price discrimination, first degree, second degree and third degree price discrimination. The first price degree discrimination, involves charging each consumer the price they are individually prepared to pay. In first degree discrimination the seller or the firm would have captured the entire consumer surplus and this will now be producer surplus, thus a firm or seller earns a higher level of profit than simply charging a single price to all of its consumers. Second degree price discrimination involves charging different prices for different amounts consumed. Third degree price discrimination involves charging different prices to different groups of people such as charging students, children and the elderly different prices. The firm of a market where this type of discrimination occurs is capable of differentiating between consumers, such as student or senior discounts. A student or senior consumer will have a different willingness to pay than an average consumer. Thus the firm sets a lower price for that consumer because that consumer has a more elastic price elasticity of demand. In third degree price discrimination
I am going to relate the stock control and forecasting techniques that Cadbury use
C3: The relationship between stock control and forecasting techniques Used in the production methods employed For this part of my assignment I am going to relate the stock control and forecasting techniques that Cadbury use with the production methods that Cadbury use. When Cadbury buy stock, it has to be considered carefully by Cadbury, the correct quantities of the stock should be purchased to reduce the amount of wastage should be controlled so that loses are controlled. Cadbury purchases its main ingredient cocoa beans from Ghana, which is then taken to marlbrook where the cocoa beans are cleaned and grounded. After this they are imported to the UK in the Bourn Ville factory where the production of the product is completed. Cadbury knows how much stock that has to be purchased due to the time series analysis that is done. The time series analysis shows historical data which Cadbury use to analyse and predict the future trends of the sales of products. This is the reason for why Cadbury needs to ensure that the time series analysis is accurate and up to date so that Cadbury can produce enough products so that there is no wastage or shortage of products, this is also meeting the customers demands. If Cadbury decided to purchase more stock than needed then Cadbury would be overspending its money and the wastage figure is likely to increase because more products than
Explain the main factors which might determine the elasticity of supply of labour to an occupation such as computer specialist (10)
Explain the main factors which might determine the elasticity of supply of labour to an occupation such as computer specialist (10) The elasticity of supply of labour measures how a change in wage rate will affect the amount of labour supplied to a given market in this case computer specialists, it shows how flexible a labour market is to enter and exit. Both elastic and inelastic labour markets are shown below. As you can see a inelastic labour market has a steeper supply of labour curve as it is not easy to enter the market usually due to the high skill levels needed and how long the investment in human capital will take before the economic agent can enter the market with the required skill, however an elastic labour market has a much less steep labour supply curve showing that the market is easier to enter and exit due to the lower levels of skill needed and is usually jobs such as waiting or shop assistants. An increase in wage rate in an inelastic labour market will have little effect on the amount of labour supplied however in the elastic market a small wage increase leads to a large increase in the quantity if labour supplied. Elastic Labour Supply Inelastic Labour Supply The main factor that affects the elasticity of supply in the computer specialists market is the amount of training and education needed in the market these cause large barriers to entry within
Cash flow. A cash flow forecast is a document that predicts cash requirements in the future. It helps a business save money for things it may need in the future
Cash Flow A cash flow forecast is a document that predicts cash requirements in the future. It helps a business save money for things it may need in the future. Financial problems may arise if the business has more outgoings than income, such as unpaid bills or sudden money loss making the business low on money. Another business could also owe money to yours and go bust. The business is most vulnerable to cash flow problems when they first start up as this is when there are more outgoings than money from customers. Certain areas, such as production, could have difficulties operating as the costs are too high. Businesses may also have cash flow problems due to other reasons, such as not selling as well as expected. A business can improve their financial situation by borrowing money from a bank, cutting costs or increasing sales. Businesses use cash flow forecasting to anticipate months where they may have a shortfall and get ready for them by taking action before they happen. It may help the business if they identify areas where the business was weak or strong and change strategy to deal with any problems and maximise potential. The five parts of a cash flow forecast are: Receipts, payments, excess of receipts over payments, opening bank balance and closing bank balance. Cash Inflow: This section shows how much the business (in this case, a garden centre) has loaned from
Financial analysis for a new business - Delight Lollies
Task One In task one, we have been asked to identify 4 different costs that James and Lucy have to pay, these costs are; start up costs, running costs, fixed and variable costs. Fixed Costs- Fixed costs do not change with production. No matter how much profit that you make you will still have to pay for things such as: rent, business rates, and interest on loan payments, insurance, salaries. Fixed costs always stay the same, even if you make no profit at all. Variable Costs- Variable costs change with the number of goods and how much a business tends to make. The costs increase as the more profit you bring back to the business. Examples of Variable costs are: raw materials, refreshments for customers, and wages Starts up costs- Start up costs are costs in which you only ever pay once, and that is usually at the start of the business. Examples of start up costs are premises, machinery, equipment, fixtures and fittings and market research to start up the business. Running Costs- Running costs are paid everyday to run the business, examples of these are wages, bills, raw materials and insurance. Fixed Variable Rent £40 Each Box purchased each day: £5.50 License for Trade £20 Block of Ice £50 Delivery Charge (weekly) £14 Total £124 Total : £27.50 Overall Total: £151.50 Fixed Variable Rent £40 Each Box purchase £55 License of Trade £20 Block of Ice
Tesco Stakeholders
What are Stakeholders? Stake holders are a certain group of people that have an interest in a business. Each group have their own interests in the business. Tesco has many stakeholders. They are as follows: * Shareholders * Customers * Employees * Government * Local Community * Suppliers * Financers * Pressure Groups Now I will explain what interests each group has: Customers. Generally a customer wants quality goods at a low cost. They would also want a variety of products to choose from. All customers want these things and by Tesco providing them Tesco will attract more customers because of people talking about it (Word-Of-Mouth). Tesco like most business' need their customers because they are the business' income as the customers are the people who buy Tesco's products. The customers are a bit like a pressure group because they apply pressure to Tesco to meet their needs. Meeting the customer's needs can be things such as expanding their stores or giving more variety on certain products. Tesco have feedback forms in their stores which allow customers to communicate with Tesco and tell how stores can be improved. This makes Tesco a more competitive supermarket. The comments Tesco will receive on their feedback forms will have a great influence on Tesco making them improve their stores to suit the customer needs. I think that the customer's comments have
"Using demand and supply diagrams explain recent changes in the price in coffee"
Economics "Using demand and supply diagrams explain recent changes in the price in coffee" Introduction A market exists wherever there are buyers an sellers of a particular good. Buyers demand goods from the market whilst sellers supply goods onto the market. Demand is the quantity of goods or services that will be bought at any given price over a period of time. The demand curve is downward sloping, showing that the lower the price, the higher will be the quantity demanded of a good. Demand curve Supply in economics is defined as the quantity of goods that sellers are prepared to sell at any given price over a period of time. The supply curve is upward sloping, showing that firms increase production of a good as its price increases. This is because a higher price enables firms to make profit on the increased output whereas at the lower price they would have made a loss on it. Supply curve If in a market there is more supply than demand there is then a surplus of this good. A rise in the price of this good leads to a rise in the quantity supplied shown by a movement along the supply curve. The change in supply can be caused by a change in production costs, technology and the price of other goods. At a lower price some firms will cut back on relatively unprofitable production whereas others will stop production altogether. The demand for a good will rise or fall if
Competitive Advantage - Microsoft Case
When trying to spill the beans of MS's success, the titles of two books from Bill Gates slip into my mind. They are "The Road Ahead" and "Business @ the speed of thought", which I would translate into "Direction" and "Speed" and could be the reason for MS's success - be good at setting strategy and adapting to the changes. However, to reframe them within the context of Modern Competitive Strategy, the reasons for MS's success are to create and maintain its modern COMPETITIVE ADVANTAGES. With the analysis of it competitive advantages, MS's profitability was more rely on its ability to DEFEND its market position rather than to create. To put it another way, the usage of MS's resources and capabilities can be better understood in light of isolating mechanisms. On one hand, MS focus on increasing customer retention. Software is an experience good. It can be tell exactly from the name - Windows XP - where XP is short for experience. For an experience good, the search costs, training cost and learning cost are high, which in turn help to increase customer retention. Here is a classic example. In 1998, Bill Gates gave his speech at Washington University and talk about piracy in China, and he said: "About 3 million computers get sold every year in China, but people don't pay for the software. Someday they will, though. As long as they are going to steal it, we want them to steal
Demand and Supply for housing
Demand and Supply for housing The determination of prices in local and regional housing markets is a classic example of microeconomics in action! We are seeing the interaction between buyer and seller with prices being offered and agreed before a final transaction is made. In this section we focus on the demand and supply side factors that determine the value of properties in a market. Each housing transaction in the UK depends on (a) The price that the seller is willing to agree for their property with the prospective buyer (b) The actual price that the buyer is willing and able to pay. Buyers place offers for a property that the seller can either accept or reject A Sellers Market When the market demand for properties in a particular area is high and when there is a shortage of good quality properties (i.e. supply is scarce) then the balance of power in the market shifts towards the seller. This is because there is likely to be excess demand in the market for good properties. Sellers can wait for offers on their property to reach (or exceed) their minimum selling price. A Buyers Market Conversely when demand both for new and older housing is weak and when there is a glut of properties available on the market, then the power switches to potential buyers. They have a much wider choice of housing available and they should be able to negotiate a price that is
Types of businesses - Marks and Spencer is a (PLC) Public Limited Company.
Task 2- Types of businesses Marks and Spencer is a (PLC) Public Limited Company, it offers its shares to the general public, often through the Stock Exchange. It is the share prices of these types of companies that are displayed in the daily press. Most of the larger companies are public limited companies, so they keep Household names like Marks and Spencer. The first owner of Marks and Spencer was Michael Marks; he started the company as a sole trader until 1894 Michael formed a partnership with Tom Spencer, a former wholesale company IJ Dewhirst, from the partnership the company started to expand. Tom Spencer died on 25 July 1905 and after 2 years Michael Marks died on 31 December 1907. It was then time for the owners today at that time to advance the success of the two founders. In 1926, Marks and Spencer became a public company and 2 years later the St Michael Trade Mark was registered. Through out the years Marks and Spencer has been expanding till today. Food departments have been opened such as café bars during these several years and many other methods have been used through out the years. Overall, we can see that growing the organization Marks and Spencer was done by four steps, firstly starting as a Sole trader, where Michael had to invest his own money and had to take risks. He had to carry out all the functions of the business. For Michael Marks this meant
