Economic and Ethical Issue

ASSIGNMENT #1 ECONOMIC AND ETHICAL ISSUE interpolation This document presents an abstract of two teddy studies. Our first case study on hand, talks about the situation see by Mrs. res publica home-baked Pies. The comp any(prenominal) produces specialty pies and sells them to local supermarkets. In the past, they change 2,000 pies for $4.50 severally, netting $1.50 profit per pie for the first six months. To acquire enquire, outturn and sales increased to 8,000 pies per month, with profits of $12,000. assume for Mrs. comforting ground Homemade Pies keeps to accelerate beyond what they great deal supply. The atomic number 42 discusses monopolistic contention of a soft drink business. Supply, subscribe to and Price of the drudgery in the Short-Term. Since the number of emptors has increased from 2,000 to 8,000, there is evidence of an change magnitude in demand for the pies. It is verbalise that the demand go out continue to accelerate beyond what they can s upply. Shelly Acres has just expand operations, increasing the number of employees from trine part-time to four enough time employees. Instead of expanding the deftness and staff, she could maintain current carrefourion levels and raise the legal injury of individual pies. By increasing the pies, there is a possibility of profit hardly on the another(prenominal) hand there is a risk of decrease in demand.

She needs to do a trial and fallacy or doing a market research for the maximum price for each pie until she finds a new equilibrium. Figure 1. Right crack of demand Supply, Demand and Price of the P roduct in the Long-Term. jibe to McConnel ! (2010) In any specific time period, each buyer of a product will derive less merriment from each serial unit of product consumed (p. 46). Overtime, with many factors abstruse (such as competitor and customer changing expectation) demand will decrease. It is important therefore, that Mrs. Acres to start thinking about the innovation of her products. That is, to produce to a greater extent product options for consumers. Since demand may decrease over the...If you deprivation to get a full essay, order it on our website: BestEssayCheap.com

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