Business Environment Essay Example | Topics and Well Written Essays - 1500 words - 2

Business Environment - attempt ExampleThis paper approves that the PMT brand of natural products is also part of a monopolistically competitive industry, but a recent visit to their business advisor informed them that the Price piece of cake of Demand for their products is inelastic. But universe in the monopolistically competitive industry, the stiff competition from rival businesses does not uphold the profit margins of PMT. There is a niche market for the PMT products, which atomic number 18 unique in their own way and add to the variety of organic cosmetics, soaps and perfumes. People who buy such products will prefer to have variety, and so a good tot of buyers will regularly come back to the PMT brand, though they test out other brands in the cogitate time. The factors that would affect this demand curve and hence the PED include the variety of substitutes available for buyers to try around, the proportion of income mandatory for the item and degree of necessity or luxur y.This essay makes a conclusion that disposable income is the amount of income a person or an organization has, after the taxes have been deducted from the total amount. It is being assumed that disposable incomes are going to fall in the next two years. With the decrease in the peoples income, the Income Elasticity Demand for the organic products would turn positive or high positive and the niche market catered to would reduce. The organic perfumes, soaps and cosmetics would thus, come under the category of luxury goods.But the fall in disposable income is not likely to affect the run offered by the salon, since people would still be catering to their basic needs. The income elasticity demand for the services is likely to fall between one and zero.