Industrial Growth and Competiton Essay Example | Topics and Well Written Essays - 750 words

Industrial Growth and Competiton - Essay Example According to Perloff (2012) Pigouvian tax can be described as a corrective measure undertaken by state or a body with authority usually inform of imposing tax to restore or limit any inefficient market activities. Taxation is applied on a firm that produces negative externality to other firm or the well-being of the entire community. The aim is to equalise the amount of tax imposed to the negative externality. Let us examine a case of a paint manufacturing firm that pollutes a nearby river using various cost concepts. With the absence of any regulation control measures, the firm can maximise its production activity without thinking of the impact imposed on another firm for example, a boat renting firm to families and individual for recreational purposes. In a typical market analysis, the paint manufacturing firm’s output and price relation can be presented in figure 1 below. In the figure 1 below, there are three main cost concepts: marginal social cost (MSC), marginal private cost (MPC), and Marginal Damage cost. Perloff (2012) defines these costs as follows. The private marginal cost refers to all the direct cost incurred by the firm or producer in creating goods or services. He also defines marginal damage as the additional cost to a firm producing additional unit of a product that impose negative externality on others. Further, he defines social damage cost as the summation of private marginal cost and marginal damage to a producer. This can be illustrated graphically in figure 1 below. Initially, the firm’s output level was at Q0due to absence of any regulation. The firm’s primary focus on this particular market scenario, where there is no any form of regulation on production, focuses on how to maximise production output at any given time. However, the need to reduce pollution leads to introduction of a pigouvian tax to make the firm comply with existing production regulation and be mindful of other

MGT_3900 Essay Example | Topics and Well Written Essays - 500 words

MGT_3900 - Essay Example The business planning process requires a thorough analysis of the following areas. This is the introductory stage of the business plan. The section involves creating an outline of the business and its intentions. The interested parties in a business plan will require knowing why the business exists. In order to make them aware of the business plan, the planner needs to include the following vital parts. This step involves clarifying what is more important to a business. Mission statement involves providing a clear purpose for the readers with the context for the venture and will giving the business its new meaning. In order to do this, the business comes up with a comprehensive mission statement. Business overview is the summary of the present state of the business venture. Business overview describes the principal owners of the business venture and its classification. For instance, sole proprietorship, partnership, or corporation lists the business owners. In addition, this stage describes the kind of business, which the venture operates such as manufacturing, retailing, wholesale, service providing, or some combination. This is the second stage of making a business plan. This section discusses the market and the approach in which the business is going to take. Moreover, this section discusses market characteristics, target customer profile, level of competition, and how the business is going to make maximum use of them to make a successful venture. This stage discusses various market forces such as supplier power, new competitors, substitute products, buyer power, industry rivalry, and government regulations. The third important stage of making a business plan is competitor assessment. The section involves a thorough analysis of the business competitors. This section involves defining the competitors and their profile by deeply looking into their strengths and weaknesses. In this section, the business plan discusses customer profile and their