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Essay / Research Paper Abstract
A 5 page paper discussing the microeconomic concepts that apply to both the producing companies providing new cars and the market segment that purchases the products. Macroeconomic conditions affect producers' choices in terms of input, and they affect the choices of potential buyers at the household level. Substitution is difficult in the auto industry; the paper uses GM's funding of Delphi layoffs as an example. Bibliography lists 4 sources.
Page Count:
5 pages (~225 words per page)
File: CC6_KSeconMicroCar.rtf
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Unformatted sample text from the term paper:
Microeconomic concepts apply to both the producing companies providing new cars, and the market segment that purchases the products. Within companies, there are choices of how much product to
produce; how much labor to use in production; how to manage fixed and variable costs associated with production; and how to alter production costs so that each of the two
products the company makes can provide a greater profit contribution without raising prices charged to retailers. Sales are seasonal, and producers seek to
spread production over the entire year so they can hold down labor costs over the course of the year. This is the case when the market and companies operating
within it are healthy, and of course there are several large producers currently facing serious problems. Whether the current market is healthy or
not, there are several microeconomic concepts to consider on the part of both producer and consumer. The purpose here is to discuss those considerations. Macroeconomic Environment
Though the focus here is on microeconomic conditions and choices arising from those conditions, they are affected by the larger economy. A household is unlikely
to decide to purchase a new car and commit to years of high payments when consumer confidence is low or when the households primary breadwinner is in danger of losing
the job that provides the familys necessary income. The state of the interest rate environment also affects the sale of cars, though probably
to a lesser extent than it affects housing sales and other big-ticket items. The Federal Reserve recently increased the base interest rate again, bringing it to its highest level
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