Economics Assignment Essay Example | Topics and Well Written Essays - 1750 words

Economics Assignment - Essay ExampleIn the final stage, the paper would formulate several further businesses and operational strategies that the union give the axe adopt in future. With the help of these theories, the company would be able to improve its business in future. The learnt from the essay would help to understand the importance of economics in the current state of business affairs. Contents Contents 3 1. Introduction 4 1.1 promulgate truncated 4 1.2 Company Background 4 2. Literature Review 5 2.1 select theory 5 2.2 market Structure Theory 6 2.2.1 Differentiation and Revenue Maximizing Theory 7 2.3 considerable Run Theory 7 3. Case Study 8 3.1 P&G and Theory of strike 8 3.2 P&G and Market Structure Theory 10 3.3. P&G and pertinacious Run Theory 12 4. Conclusion and Recommendations 13 Reference List 15 1. Introduction 1.1 Report Brief This essay will analyze the business of the famous American consumer goods company named Procter & Gamble (P&G). The police detec tive would analyze the business performance of the company on the basis of economic theories by scrutinizing the companys annual report. In the later stage, the researcher would explain the business and operations strategies undertaken by the company through with(predicate) the analysis of its corporate activities. 1.2 Company Background P&G, the famous consumer goods company in America has its home office in Cincinnati, Ohio, United States. The products which are produced and sold by the company are primarily categorized in terms of three segments. These are cleanup agents, pet foods and respective(prenominal) care products. The company enjoys a spirited brand value in the market, with annual sales of about $83.68 billion (2012). The organization also enjoys a wide social presence in the market. It operates in almost all the countries in the world and as recorded in 2012, its operating income was $13.29 billion (P&G, 2012). The following context of the paper would explain the p erformance of the company by analyzing its annual report on the basis of economic theories. 2. Literature Review 2.1 Demand Theory Demand for a commodity or a service in the market is the want of an individual backed by proper purchasing power. If a pauperization is created by a single dwelling in an economy, then it becomes an individual demand. The horizontal integration of all the demand curves is termed as the market demand curve. According to the law or Theory of demand, considering the other factors touching demand to be constant (Ceteris Paribus), the measuring rod demanded for a product is inversely related to its prices and vice versa (Mullerat, 2011). Thus, a market demand curve is incessantly negatively sloped in nature with the assumption of Ceteris Paribus. Figure 1 Demand Curve outlay Demand Curve (Market or Individual) Quantity (Source Authors Creation) A shift in the demand occurs when other factors affecting demand, apart from price, changes. These other factor s include tastes and preferences of the consumers, price of substitutes and price of complements along with income of the consumers. Figure 2 Shifts in Demand Curve Price Initial Demand Curve New Demand Curve Quantity Demanded (Source Authors Creation) The higher up diagram shows a shift in the demand due to changes in any of the demand determinants. 2.2 Market Structure Theory The market structure theory explains the exact type of market in which organizations can operate. The market structural differentiation is mainly categorized on the basis of the strength of the seller and vendee in a