P1 – Explain the effects of changes in the economic environment on a selected business.
D1 – Evaluate the impact of changes in the economic environment on a selected business
In this part of the assignment I am going to be researching the economic factors of Barclays as a business.
The Business cycle
All of these factors have an enormous impact on my selected business (Barclays) as the economy goes from growth and decline. As well as many others, Barclays is majorly affected as it is in the financial industry. These different factors appear throughout what is called the ‘Business Cycle’. The cycle shows the fluctuation of the activity within the economy over a period of time and consists of 4 main stages; as well as many others,…show more content… Copper declined 3.4 percent this year, extending its worst annual loss since 2011, as a property slump in China sapped demand in the world’s biggest consumer. Prices won’t follow the slump in oil or iron ore, which fell more than 40 percent last year, as those raw materials “underwent revolutions on the supply side” while copper producers struggle to boost output, Barclays said. Commodities fell to a 12-year low this month as crude oil tumbled amid rising supply.
Elasticity of demand “the measure of how much the quantity demanded of a product responds to a change in price”
• Elasticity of demand = % change in quantity demanded / % change in price • Elastic demand would mean a figure higher than 1
• Inelastic demand would be less than 1
Price elasticity tells a business how sensitive demand is to changes in price.
There are some goods, however, that have relatively static demand curves. In particular, some goods remain in constant demand regardless of changes in the price. Demand for these goods is called inelastic. (If the demand for a good is sensitive to price changes, it is called elastic.) A handful of factors influence the price elasticity of demand of a particular good: its importance, the availability of substitutes, and the percentage. Factors that Increase Demand, Shifting Curve to the Right: *
