Cover letter, content page, high quality, proper referencing, 3500 words and plagiarism report.

Task 1
Micro economics is the behavioral study of organizations and individual customers wherein it is the study of the complete economy. Micro economics is one of the major contributors to the decision making process in an organization. In a market all the firms which are operating have to undertake proper consideration of the constituents and determinants of the economic environment fort he proper functioning of the organization. This economic environment is majorly the micro economics factors in an economy. The constituents that a manager undertakes to maintain proper and efficient working of the organization is the managerial economics, and micro economics forms the base of managerial economics.
The relation between the business and the microeconomics exists because microeconomics studies the elements that affect the individual business and organization; which is the opposite of macroeconomics that deals with the entire economy as a whole.
To understand the relation between the business and microeconomics can be explained with the help of an illustration. For example, an investor wants to invest in a coffee shop business. To measure and assess the viability of the proposed business the investors have to apply the principles of micro economics. The following are the major factors to be assessed for the business activities:
1. The investor should initially study the market behavior and the elements that satisfy the set up of this kind of a business in such a market. Here, comes the factor of micro economics to be studied in context of set up of a business and the study of market.
1. The next micro economics factor to be taken into consideration is the environment. The environment consists of the factors like location and policies formulated by the government in that particular place, these factors are important as they may have a positive as well as negative affect on the business activities. The governmental policies consist of taxation laws and rules for instance. In this particular case, if the investor decides to import coffee beans from other countries, he needs to take into consideration the factors like bans on trade, import policies and quotas.
1. Another important factor is that of location which include setting up of the coffee shop in an ideal location that
ings the maximum sale profits. The ideal location for the shop will always be near the targeted customers. The other locations may include the shopping area of people, where the concentration of buyers is the maximum, in that case they look around for relaxing and coffee shop is the best destination.
1. The last factor to be studied under the microeconomics environmental factor is that of competition. The investor should have a market survey of the coffee shops in the area he is planning to open his shop. If the competition is too much, then the level of profits will fall due to the increased competition level. The most important aspect of learning about the competition the market is to understand the business strategies prevailing in the marketplace because this will help the investor in formulating effective and efficient marketing strategy.
The managers in an organization are completely dependent on the changes in the elements of micro economics. The factors and elements like demand analysis, pricing theory, theory of revenue and cost, supply and production is the backbone of any organization and are of top priority for the manager’s decision making. All the issues in an organization are sorted with the help of theories of micro economics.
Since, all the managers want their decision making process and functioning of all the departments to be efficient and that all the business planning can be effectively implemented, therefore the concept of micro economics assists the managers. For achieving the organizational goal of maximization of the profits, optimum decision making is required and the decision making is dependent on the factors of micro economics. Therefore it is clear that micro economics factors are responsible for shaping up the market structure of any industry and the impact of such factors are greater in context of other processes in an organization. The micro economics analysis is applied to day to day dilemma and concerns of the managers; therefore its importance is the utmost in context of the business organization.
1. Importance of Micro Economic Business Environment:
The dependence of Administrative Economics on Micro Economics is clear by the following points:
1. In case of the increase in cost of production, a manger will need to increase the price of that commodity; the concept of price elasticity of demand assists the manager in decision making of increase in price, in such a way that the demand for the product does not fall.
1. The theories of micro economics that are pricing theory, cost and revenue theory are being utilized for the purpose of fixation of the price of the products.
1. Another theory of micro economics is the theory of production, which helps the organizations in making the decisions in context of the availability of the fixed factors of production and variable factors of production, condition of technology being used in the production, availability of the necessary and fundamental raw materials.
1. The other theories like game theory, linear programming helps in decision making of with the help of applications of micro economic.
1. One of the accountability of Manager is to exercises financial plan and resources for separate subdivisions of the business which is done with the help of Capital Budgeting and Capital Rationing.
1. Analysis of wellbeing economics assists the Manager in taking care of societal accountability of the company.
1. Microeconomics is the study that deals with partial equili
ium analysis which is useful for the manager in deciding equili
ium for his organization.
1. Businesses Objectives and Business Behavior in context of Economics:
In context of the economic environment, the objective of business...