ASSIGNMENT COVER SHEET
Learner: Patricia Lett
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They would like to develop a document for them that describes and analyzes essential economic and legal factors for their horizontal construction company. Research will be done to describe and analyzes employment and labor law influences as the company grows both domestically and internationally.
To ensure that the company obtains sufficient credit and business standing, and has reliable market conditions and product liability these factors must be taken into consideration. In the report hereafter, I will depict and analyze the macro and micro economic factors that directly affect our company operation and all legal considerations for construction operations including crime, liability ligations, and torts.
First I will explain the economic considerations that will play a factor in the development of our new company. The Law of Demand states that a consumer will pay more for a product that is demand and a price has to be lower if the product is not in demand. The reaction of consumers to a price change is measured by the products ability to fluctuate with demand. According to (McConnell, Brue, Flynn, 2009), “demand is inelastic if a specific percentage change in price produces a smaller percentage in quantity demanded.”
Elasticity is important for XYZ Construction, Inc. associates to the effect of price changes on total income and thus on earnings. The total income the seller receives from the sale of a product in a specific time period is total revenue. Although a lesser price is received, enough extra units are sold to more than make up for the lower price. Total revenue will decline because the increase in sales will not fully offset the decline in revenue per unit. (McConnell, Brue, Flynn, 2009)
The price elasticity of demand is determined by several factors. Substitutability is the first. The price elasticity of demand is greater with a larger number of substitute goods that are available. Proportion of income is the second; the price of elasticity of demand is greater, the higher the price of a good relative to consumer’s revenue. Luxuries versus necessities are the third factor. If a good is deemed to be a luxury rather than a demand, the price elasticity of the demand is greater. Time is the fourth factor. To adjust to changes in the prices time is a necessity for consumers. (McConnell, Brue, Flynn, 2009)
In microeconomics the short-run is a period of time to short to modify company capacity but long enough to use the fixed-sized company more or less demanding. According to (McConell, Brue, & Flynn, 2009), “the long-run in microeconomics is a time period long enough for firms to adjust their company sizes and for new firms to enter or existing firms to leave the industry”.
Microeconomics is a type of study that focuses on individuals and business decisions; whereas macroeconomics studies the economy as a whole by focusing on country and government decisions. Macroeconomics views the big picture of...