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Eco Assignment 2

Managerial Economics (Lebanese International University )

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Rami algahrani
62010221
Managerial Economic
Assignment 2

Demand
1. Digital Camera
For demanders the purchasing power of digital camera will decrees for those main factors:
 Competition is an essential element of market economies because of availability of
alternatives. Different firms have the freedom to attract customers based on price, quality,
service and convenient. The type of competition will depend on the product and market
structure. For example, in a market with many traders selling cell phones price will be a
key factor. Consumers will shop around to buy the cheapest.

 Seasons.

 Commercial Advertising: Heavy spending on advertising and marketing can help

 A reduction in the price of the new iPhone should lead to an expansion in demand for the
iPhone as demanders will be a substitute product for the digital camera

2. Product purchase on the internet

Nowadays, purchasing power of demand over the internet increases so, when running an
ecommerce store company has to worry about the user experience above all else. What effects
user experience can range from company return policy to the level of customer service – even
company has to care about social media reputation can affect sales, repeat purchases and more
the main factors:

 Competitive Pricing: cheap products has made consumers adamant on searching for the
lowest cost with the best product quality. This extends into specific product pricing as
well it is important for ecommerce store owners to benchmark their pricing across several
competitors to make sure they are competitive on pricing and not falling behind.

 Product Quality: Just as important as price is product quality. In some cases, this may be
out of your control, but if you make or manufacture your own products, this is an
important factor to take into account. If you’re wondering how much of a role perceived
product quality means to consumers, take this into consideration

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Rami algahrani
62010221
Managerial Economic
Assignment 2

 Shipping Time & Cost: There are many stores that keep it simple with a single shipping
option to allow for flat rate pricing or so that they can offer free shipping. The incessant
need for things to be done yesterday has been ingrained into the modern lifestyle and it
shows when you look at the volume stores do when they offer fast delivery. To sweeten
the deal, add well-priced shipping options on top of fast delivery.

3. Convenience food: Given the priority for population dietary change there is a need for a
greater understanding of the determinants that affect food choice

 Cost: There is no doubt that the cost of food is a primary determinant of food choice.
Whether cost is prohibitive depends fundamentally on a person's income and socio-
economic status. Low-income groups have a greater tendency to consume unbalanced
diets and in particular have low intakes of fruit and vegetables14. However, access to
more money does not automatically equate to a better quality diet but the range of foods
from which one can choose should increase.

 Accessibility: Accessibility to shops is another important physical factor influencing food

choice, which is dependent on resources such as transport and geographical location.

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Rami algahrani
62010221
Managerial Economic
Assignment 2

Supply

1. Crude oil: oil in its most natural from straight from the ground the points below
illustrated the factors that effect:

 Crude oil supply:

 supply greatly influences pricing when supply is low, prices increases

 supply levels vary based on production and demand OPEC accounts for 40% of
all crude oil production in the world and largely impact and global pricing.

 Increase oil production have increase supply and lowered pricing

 Quality of crude oil: crude oil pricing is dependent on the level of viscosity and
impurities.

 Natural disaster and world crises: when a natural disaster or world crisis threatens oil
supply or the distribution process the uncertainty causes volatility in pricing.

2. Hotels rooms: For the most part the hotel’s supply will remain steady as they know how
many rooms they have to sell. Also a Revenue Manager will be aware of any new supply
from new hotels in their area and will often need to adjust their rates accordingly.

 Location of the hotel: If the hotel is centrally located, within walking distance of
shops, restaurants and tourist attractions, chances are it’s going to be priced higher
than more remote hotels that offer guests less convenience

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Rami algahrani
62010221
Managerial Economic
Assignment 2
 Competition: Hotels look to see what the competition is doing. They want to try to
lure customers with better deals and stay competitively priced, yet still need to make
a profit.
 Season: You’re going to pay top dollar during peak season, simply due to the increase
in demand. On the other hand, you’ll likely be able to find good deals on hotels in the
off-season, so if you're flexible with the time of year you can travel, it can be a good
way to save some money.

3. Laptop Computers: The laptop computers industry has been in the situation of consistent
decline for the past several years. There are several factors that have been affecting its
performance and the decline looks perpetual. the problem is in the fast changing
environment. The factors that effect:

 Economic factors: mostly have a direct impact on market conditions. However,

sometimes even small economic changes can shift the tide, making the situation
less than favorable for the companies. Economic growth drives industrial growth
and economic recession whose impact is still being felt in several corners of the
world is also a reason that the laptop computers industry has been on a downward
trajectory. There are other factors too like production costs, labor costs etc. that
affect the profitability of the laptop computers makers.

 Technological: Technological factors are very important when it comes to

laptop computers sales. laptop computers and laptops are technological products
that are affected deeply by technological changes. The biggest technological
change that has impacted the laptop computers market is the increase in the
increased popularity of the mobile technology. The increased sale of smartphones
and tablets has impacted the laptop computers industry deeply. It is because
people who used to buy laptop computers for small needs or for entertainment
purposes are now more inclined to buy smartphones and tablets.

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