Macroeconomics Case Study

The failure or success of a business depends on the decision that managers will make. Micro and Macro-economic branches are the tools that managers need to consider when making bossiness or taking decisions. The Economy website article, “Difference Between Microeconomics and Macroeconomics” (2015) points out that “Microeconomics is the study of particular markets, and segments of the economy. It looks at issues such as consumer behavior, individual labor markets, and the theory of firms. Macroeconomics is the study of the whole economy. It looks at ‘aggregate’ variables, such as aggregate demand, national output and inflation.” Therefore, the decisions based on either microeconomics or macroeconomics tend to be influenced by various factors,

Reducing selling prices is a strategy that will help, but they also have to consider the impact of cost reduction to the profit margin. If it will lead to loses, it will be advisable to employ other competitive measures. On macroeconomics, the managers need to examine macroeconomic trends in terms of the stability of the entire business environment. If there is an increase in home foreclosures, unemployment and bankruptcy managers may decide to reduce new stocks since sales are likely to reduce. It is hence evident that macro and micro economy should be the chief determiners of

Some are fixed while another are variable. Some of the variable factors include seasons or events and environmental changes. For example, the fashion trend-setters and taste makers in the media and entertainment industry or sports celebrity world may reveal a preference for green blouses rather than blue ones. Consumers are likely to be influenced by these trend-setter thus buying more of green shirts than blue shirts. This implies that the demand for blue blouses will significantly drop the same as their supply (Adil, 2006). Similarly, environment and seasons tend to affect the demand and supply of a significant number of goods. For example, jackets and warm clothing will be demanded and supplied more during the winter than summers while ice cream will be in demand during summer but not the winters. Similarly, the demand and supply, of drinks will be higher during the festive seasons than other seasons. These examples implies that are varying factors that can easily affect demand and supply of various goods either adversely or in favor of an organization. Some of these factors are predictable and hence measures to deal with them can be taken while others are unpredictable and hence are likely to impart adverse effects to the organization (Fisher,