Economic Theory Assignment Help
Nike is the shoe store, which is situated in Beaverton and conduct marketing and selling of apparel, footwear, accessories
, equipment and services. Economic theory is the concept that defines that active intervention of the government in the market place and monetary policy is helpful in ensuring the economic growth and stability. Government plays an important role in making the balance between the ups and downs in the business life cycle. Nike uses the decision making theory in order to make investment in their workforce and also expect increase production. With the help of increase productivity, company divides the profits among contract factories and their workers. This economic theory case study assignment help has also helped the company in making proper allocation of financial and human resource. Further, through this theory, Nike uses different strategies in order to produce innovative products as per the needs and wants of customers (Becker, 2007). Nike has integrated the economic theory with the market structure of the firm that helped the company to increase profitability. Oligopoly structure and related actions are helpful for the company in analyzing the profitability of the firms. Oligopoly market structure has less number of competitors, which is helpful in analyzing the profitability of the firm. There are several factors such as price, production cost, marginal cost and entry that helped the company in identifying the profitability. Therefore, government intervention in economic theory is helpful in analyzing the overall position of the company in marketplace.
Marginal Cost and Marginal Revenue Company can use marginal cost and marginal revenue in order to determine the impact of producing one more unit in the production system. Profit-maximizing output occurs when the marginal revenue is equal to the marginal cost. With the help of marginal revenue and marginal cost, managers or analysts can identify the effect of changes within the company. Marginal cost is the change in total cost due to the change by one unit in the quantity produced. Company analyzes the marginal cost in order to determine at what point an organization can achieve the economies of scale. Therefore, it is identified that marginal cost and marginal revenue plays an important role in identifying the profitability of the company (Gilboa, 2012). Company can calculate the profit of the firm by subtracting the total revenue from the total cost. Marginal revenue can be calculated by dividing the change in total revenue by the change in quantity output. In the oligopoly market, organization continues to produce product and services until marginal revenue become equal to the marginal cost. With the help of marginal revenue and marginal cost, company can be able to measure the overall profitability of the firms.
Information required in Marginal Cost and Marginal Revenue In order to determine the profit maximization, company requires the total cost information which includes the variable and fixed cost. Apart from this, company can also use sales data and demand for the company’s product. Increase in the sales and demand of products will also increase the overall profitability of Nike. Thus, company measures the profitability on the basis of sales and demand of the shoes.
With the help of this,
company can be able to take decision related to the production and assessment of the profitability level (Casson, 2003). After determining the production equilibrium, profit maximization can be used when both the terms are equal. Further, on the basis of company position in the market, profit of the firm can be determined. With the increase in profitability, company can be able to make sound position in the market. Further, company has also captured the large part of marketplace. With the help of marginal cost and marginal revenue, company has analyzed the impact of each and every change in the production system. Without such information, company can take decisions through other methods such as strategies and policies. After analyzing the policies of the company, various decisions, related to sales, profitability, allocation of resources, purchases etc. can be taken. Therefore, it is identified that there are various other methods to calculate the profitability of Nike (Nike, 2012). References Becker, G.S. (2007). Economic Theory. USA: Transaction Publishers. Casson, M. (2003). The Entrepreneur: An Economic Theory. USA: Edward Elgar Publishing Gilboa, I. (2012). Uncertainty in Economic Theory. USA: Routledge. Nike (2012). Retrieved from http://www.nike.com/in/en_gb/?ref=https%3A%2F%2Fwww.google.com%2F You can avail any time our economic theory business assignment help from US and Australia experts. We assure you that you will receive 100% original and quality assignment help on time.