The module provides an economic framework for the analysis of decision making within the firm. The economist’s view of the world – as encapsulated in economic ideas, concepts, theories and models – helps us to understand more fully those aspects of behaviour which are the very essence of business activity: namely, production and consumption. Economics provides a framework of analysis to be used in interpreting and explaining business related issues.
The module predominantly uses a microeconomic approach to explain the workings of the firm and its environment. Students will already have studied some basic economics within the first year Business Environment module. This module will build upon and develop the economic concepts introduced in that module.
In focussing on production and consumption, the module will seek answers to such key questions as:
- How can we explain what underlies consumer behaviour?
- What factors affect consumer demand for goods and services?
- To what extent is a person’s demand influenced by changes in income or in the prices of competitive goods?
- How do firms organise themselves to meet consumer demands?
- What factors influence a firm’s goals and behaviour?
- What is the relationship between a firm’s output, its cost and profitability?
- How do firms decide on their pricing strategy?
- How might the structure of the market in which a firm operates affect its conduct and performance?
- How can a firm influence the degree of competition in the market place?