StudentShare solutions
Triangle menu


Not dowloaded yet

Extract of sample

Similarly, a fall in the price of a particular item shows a rise in the demand for that item. On a graph, a fall in price will show an inward shift of demand curve and a rise in the prices will show an outward shift of the demand curve. The diagram below shows a fall in demand due to a price rise. Figure 2 Shift in Demand – This happens when the demand of a particular item rises or falls due to various factors which include an increase or decrease in the number of consumers; an increase or decrease in the prices of substitute products and complements; a change in consumer incomes (ability to afford that particular item); changes in tastes and preferences of consumers; and price expectations. On a graph, a rise in demand is shown as an outward shift while a fall in demand is shown as an inward shift of the demand curve. [McConnell, Brue, Flynn, 2009] Shift in Supply – This happens when the supply of a particular item rises or falls due to various factors which include an increase or decrease in the prices of the resources used to manufacture that item or render a particular service; an increase in technology which is more likely to increase the supply; an increase or decrease in the number of suppliers; and a rise or fall in the price of a substitute or a complement item. ...
For any business, its risk management will be naturally concerned with avoiding such negative factors which could kill the business. Therefore, the first task for any such manager is to identify what might potentially harm GoFast Airlines in the future. Prices of Fuel As a strategist, the first factor to consider is the rising prices of fuel, which is the most important raw material for any form of a travel company today. With the increasing fuel prices, GoFast will naturally have to increase fair prices to cover the costs, while still competing with giants like British Airways which have been there since a longer time and are more financially secure. Higher prices may cause a fall in demand for air travel which can directly reduce the number of fares for GoFast Airlines, as which happened with Singapore Airlines earlier in 2011 [Singapore Business News (SBN), 2011]. This will directly affect their low-price flights approach which, mixed with quality service, gained them the customer base they have today. Economic Recession Economic recession is potentially the most important economic factor which could affect the profitability and the market leadership of GoFast Airlines. In times of economic recession, the consumer’s purchasing power is weaker. In such times, although important corporate business trips may be made anyway, the smaller business may think twice before making an expensive trip. Most importantly, however, leisure trips are more likely to decrease in greater numbers in time of recession than business trips. Even in this situation, the consumer would be able to afford lesser than before and this will affect the number of fares. The demand will naturally fall for flights and so will GoFast’s sales and profitability [Milmo, ...Show more


FINDINGS Glossary Market Equilibrium – This is a situation where the supply of a particular item is exactly equal to its demand so that there is neither a surplus nor a shortage of this item in the market. On a graph this is shown where the market demand curve intersects with the market supply curve…
Author : rhauck
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
with a personal 20% discount.
Grab the best paper

Related Essays

Technological and Economic Factors Affecting Business Environment
It continuously grows because of innovation and adaptability that the operation management employed so that the company could cope up with the dynamic changes of the environment. The travel industry matches prices with the different segment and classes of society to attract travellers.
8 pages (2000 words) Essay
The Economic Environment of Business
For instance, through competition companies have been able to come with new innovation in a bid to satisfy the rapidly changing and dynamic market that exist currently in the United Kingdom. However, in this paper we are limited to the oil industry and consequently the oil market in the United Kingdom.
3 pages (750 words) Essay
The Economic Environment of Business
Milk products are generally purchased by all households, however liquid milk accounts for the largest share of this market. On the other hand cheese faces strong competition from other complimentary goods. Health agendas such as the need to consume omega fats, cholesterol lowering products and probiotics in 2005 and 2006 have led to a growth in the market of milk products.
12 pages (3000 words) Essay
int efforts in solving global problems of mankind, formation of universal human values – all these is favourable to overcoming barriers in the international cooperation. “In the East there are questions of national separation, retribution, and ethnic cleansing” (European
5 pages (1250 words) Essay
The Economic Environment of Business questions
Although, Aldi offers only 1,000 lines at its 430 stores compared to average of 40,000 a supermarket typically offers, it has received great consumer response that has increased its market share to a record 2.2% (growth of more than 35% year-on-year basis)
3 pages (750 words) Essay
International Economic Environment of Business
This paper discusses the transformation of United Arab Emirates from a local Middle East trading outpost to becoming a center for international business. Analyses of the recent trade and investment reforms in the country reveal that international businesspeople continue to flock into UAE because of the prevailing comfortable business environment.
7 pages (1750 words) Essay
The Economic Environment of Business
Moving with the times has been one major strategy while others expand at every available opportunity. Ryanair is one such airline that has expanded significantly since 1985 (Ryanair 2010). The 2000s for Ryanair have been years of success and have gone down in
14 pages (3500 words) Essay
Explored in the essay are the major political events threating DirectTV’s operations in Latin America and possible actions that can be undertaken to safeguard the company. The Latin American subsidiary of DirectTV
2 pages (500 words) Essay
The Economic Environment and Anatomy of Business
The relationship between price and the way abundant of an honest or service is equipped to the market gets thought because they provide relationship. Price, therefore,
8 pages (2000 words) Essay
Economic environment
This helps to keep the price stable and this will greatly benefit the economic system of a country. This will ensure business sector to perform with confidence as price levels will not
1 pages (250 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation