bus 101 ass3.docx - BUSN-101 Assignment#3 1 How does...

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BUSN-101 Assignment #3 9/26/2014 1. How does microeconomics affect business? How does macroeconomics affect business? Why is it important for businesspeople to understand the fundamentals of each? The role of macroeconomics in business can be seen in way the condition of the economy affects individual businesses. For instance, during a recession, the behavior of customers and consumers of goods and services change to reflect the change in the economy. Such changes can be seen in the way the demand for goods and services drop and the manner in which such a reduction affects the balance sheets of the various businesses. In business microeconomic factors like research, promotion, demand, supply and pricing strategy indicate if the campaign will have a profit or not. Like in a highly competitive industry in which consumers possess many choices, supply might exceed demand. Over time, this can cause some businesses to fail. 2 . Draw supply and demand graphs that estimate what will happen to demand, supply, and the equilibrium price of coffee if these events occur: a. Widely reported medical studies suggest that coffee drinkers are less like to develop certain diseases. The requirement curve will change to the right. The equilibrium amount goes up.
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b. The cost of manufacturing paper cups increases. The supply curve will shift to the right, the equilibrium price goes down. c. The state imposes a new tax on takeout beverages. The demand curve will shift to the left, equilibrium price goes down. d. The biggest coffee chain leaves the area. The supply curve will shift to the left, equilibrium price goes up. 3. Describe the four different type competitions in the private enterprise system. In which type competition would each of the following business be likely to engage?
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