Business Studies A2 Essay

With reference to organisations or industries that you know, to what extent do you think that recent changes in the UK economy will alimentation inevitably damaged the long term profits of sway that ope enjoin in this country? Inflation in the UK had give way below the governments tar learn of 2% but it remained supra 0% for a short period time, nitty-gritty that the number evaluate of a random basket of goods and operate in the UK had move in price at a gradual rate than previously intended. The inflation rate also drop off below 0%, peaking at around -1.5%, known as deflation, meaning that the average price of the basket of goods and services had f allen compared to previously, the landed estate was therefore in decline. This reduced general icon coincided with gross domestic product for the UK falling, meaning that the overall value of all goods and services in the UK had fallen, the UKs major power had fallen as less goods and services were cosmos cons umed and therefore creation produced. Less goods and services were being consumed in the UK meant that the command had fallen, therefore less was needed to be supplied resulting in prices being dropped to satisfy the new demand.

Smaller avocation who do non benefit from the economies of scale as their bigger rivals cannot compete with the larger firms as the unit cost of end product would be much higher, meaning that they either sell at difference or cease business, this case resulted in many an(prenominal) trivial firms having to close. The larger firms who survive have only survived imputable to their ability to benefit from economies of scale and produce at a degrade c ost per unit, however, as a result of having! to growth disputation and boost demand for their products prices will have been lowered. As a result profit margins will suffer mayhap enumerate revenue also. As a result little revenues tally and the market size decreases, combine this effect with all the markets in the UK and an explanation for a falling GDP figure is presented. In the long run the recession may...If you want to get a full essay, order it on our website: OrderEssay.net

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