Economics Essay Example | Topics and Well Written Essays - 2000 words - 2

Economics - Essay ExampleFor example a company that has an nut case cream machine that usually produces 40 boxes of 1 pint of ice cream a twenty-four hours was able to produce as much as 80 boxes of 1 pint of ice cream a day by cutting on win-time due to machine breakdown caused by lack of machine maintenance.It could also refer to the application of a special trick in a machine in order to enhance its speed and therefore increase the volume of production. Another way is to maximize the use of manpower by establishing a short and clear chain of command within the business organization. Therefore, it is possible to avoid the incidence of employing too much inessential employee in the crowd.In order to achieve economies of scale, a good management is essential. Basically, it is the managers and supervisors who suggests and/or make critical decisions in order to maximize the daily fixed be (such as labour costs and over-time pay and electricity costs) of the company. These are al so the same group of people who are responsible in cutting down the number of rejections in a production line. Minimizing the number of rejections can indirectly increase the companys profitability by cutting down the unnecessary opportunity losses and prevent avoidable expenses on the part of the company.Q.2Explain how changes in the equilibrium price and measure are influenced by the elasticity of use up and supply. Explain the difference between a shortage and a surplus and discuss why either might occur.Basically, the market equilibrium price and quantity is the point where the quantity supplied is equal to the quantity demanded. The said equilibrium point changes when there is an imbalance between the demand and supply. For example if the demand for a legitimate goods is above the supply, the price of goods will automatically go up to a certain point where a new equilibrium point will be created. Likewise, if the supply