The Market Business Questions Essay Example | Topics and Well Written Essays - 1500 words

The Market Business Questions - Essay physical exertion fit in to the article, the value of eggs has more than tripled and this may have a similar effect on the prices of biscuits. The market for biscuits pull up stakes be affected in the sense that high prices caused by an increase in the apostrophize of an input will increase the price of biscuits. The demand for biscuits will fall drastically given over the fact consumers argon price conscious. According to the rule of demand, customers are willing to buy more at fewer prices and buy less at higher prices. This is illustrated by the diagram below P D P2 P1 D Q2 Q1 Q The sale of biscuits will no longer be lucrative because businesses will be put down low sales volumes. This will result in most of the business closing down such lines of businesses or resort to importing biscuits produced outside the British market. This can be explained by the fact that impertinent biscuits are produced cheaply hence less expensive. Textboo k economic theory would agree with the statement it is no longer about price, it is about supply. According to the law of supply, all other factors being equal, as the price of a good or service increases, the quantity of goods or services offered by suppliers increases and vice versa (Altman, 2004, p. 39). Suppliers will be more willing to supply eggs given that they fetch very high prices in the market. This is to maximize profits from the supply of eggs. This is explained in the diagram below P P2 S P1 S Q1 Q2 Q Q2. A mixed economy is characterized by the presence of both public and private institutions. The two institutions are involve in addressing the needs of consumers and solving economic challenges that may exist in the market. Consumer needs and demands can be addressed adequately when the institutions utilize existing opportunities in qualification goods and services available in the market. According to principles of economics, scarcity refers to a situation whereby th e available resources in an economy are not adequate to fill up the needs of the economy. This results in consumers having some of their needs unsatisfied. Depending on the demands of consumers, the disposal has the responsibility of analyzing and determining their level of importance in improving the welfare of the consumers. The government also determines the appropriate procedures to be used in addressing such needs. Opportunity cost can be defined as the cost of a foregone alternative. For instance, the apprehension opportunity is best illustrated in a situation whereby someone decides to become an entrepreneur after complementary college. In such a case, the person gives up the chance of getting fulltime employment and the opportunity cost of his decision to become an entrepreneur is the monthly income and allowances attached to the fulltime job. The two concepts of scarcity and opportunity cost are very important to the government given that the government collects revenue s and uses them in running the economy. The government has the responsibility of making sure that the economy is running smoothly by spending its revenue on essential projects. judicature spending should be influenced by a number of factors such as challenges, costs and benefits of such projects. The government needs to develop a list of all the projects it intends to put in place and determine their relevancy to the economy (Cassel, 2002, p. 122). This means that the governme