Professional Documents
Culture Documents
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
Objectives:
• identify and explain different principles, tools,
and techniques in creating a business
• apply tools and techniques for business
opportunities
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
Economic Analysis of
Profit Maximization
• Profit
– Is the gap or difference between revenue and
cost.
Thus, the condition of for maximum profit is when
marginal revenue is equal to marginal cost.
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
Market Concentration
This refers to the number of sellers and
buyers in the market.
The more concentrated the market means
the lesser producers are there in the industry.
These few suppliers command huge market
power in determining the price the price in the
industry.
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
Barriers to Entry
This refer to inherent features of the
industry and the various means devised in the
market to prevent the entry of potential players
and competitors that want to take advantage of
the enormous profit in industry.
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
Product differentiation
This factor refers to the ability of a
business firm to create a market niche through
several means of varying its products and
services. The ability of the business enterprise to
convince the buyers that its products or service
it is selling is different from similar products and
services can give market power to the firm.
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
Limited Information
This element refers to the unevenness in
the distribution of information among the actors
in the market. When market actors are not
evenly informed those with more information
can have market power and extract surplus fron
the other actors.
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
World Economy
Government
Changes in the Regulation and
Natural Environment policies
Firm
Technological
Social Changes
Development
Demographic
Changes
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
• Demographic Changes
– From the country’s population business
enterprises draw primarily their customer. As
population expands, it creates additional demand
for product and services can enhance the
profitability of business companies and several
industries.
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
• Social Changes
– Modifications in family structure and other social
changes have impact on consumer behavior and
tastes.
– For example, with traffic congestion in Metro
Manila getting worse many students and young
professional have opted alternative measures to
address this daily toll on their lives.
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
Activity
Compose a slogan on the importance of
environmental protection.
Submit a position paper to our President
on the priorities for infrastructure development.
ABM_AE12
APPLIED ECONOMICS
BUSINESS OPERATION IDENTIFICATION
Quiz:
1. It Is the gap or difference between revenue and cost.
2. This refers to the number of sellers and buyers in the
market.
3. This refer to inherent features of the industry and the
various means devised in the market to prevent the entry of
potential players and competitors that want to take
advantage of the enormous profit in industry.
4. It refer to requirements for a large production plants for a
feasible operation in the industry.
5. This element refers to the unevenness in the distribution of
information among the actors in the market.
ABM_AE12
6 – 10 Poster’s Five Forces Of Competitive
Position
APPLIED ECONOMICS
ECONOMICS AS AN APPLIED ECONOMICS
Reference:
• Tullao Jr., Tereso S. Applied Economics For A
Progressive Philippines. Phoenix Publishing House;
927 Quezon Ave., Quezon City. 2016
• Pagoso, Cristobal M. Philippine Economics (Macro
Approach). NELSON PUBLICATION; Marimar
Village Paranaque City. 2003
• Carnaje, Gideon P. Applied Economics. Vibal Group
Inc, Araneta Avenue, Quezon City. 2016
ABM_AE12