Economics is divided into two categories: macro and micro. Macro: macro economists look at the entire economy as a whole, whereas micro-economics is concerned with individual markets. Micro and Macro Economic Factors Influencing Business.
Micro-Economics deals with the business environment of the firm: how it works and how it affects all other aspects of the business. The micro-economic factors include the price of raw materials, the costs of labor and the amount of capital available, which are determined by a variety of variables. Other micro-economic factors may include the demand for goods and services, the profitability of the firm and the impact of external events.
Macroeconomics is concerned with the factors affecting the whole economy, including those that affect the firm individually. These include the government, the banking sector, the supply and demand for certain products, the price of land, the price of raw materials, the demand for labor and the size of the firm itself.
There are many different kinds of micro-economics, and all of them are based on the various micro factors that influence the whole economy. Some examples of micro-economics include the following:
While macroeconomics can sometimes seem like an overwhelming topic, it really depends on what kind of firm you have, where you're situated, and what you do. For example, if you are interested in business statistics, then you should be concerned with macro-economic factors.
Micro-Economics, however, deals with the company as a whole and with the firm as a whole. It includes the business environment, the costs of manufacturing, and the market prices of particular goods. Micro-economics can also include things such as the supply and demand for specific types of commodities, the pricing of land, the production process, and the impact of government policies. This is important to note because of the fact that there are many different types of firms and industries that fall under micro economics.
A firm can be considered micro when it meets one or more of the criteria for macro economic factors. However, a firm can also be considered macro if it is not meeting any of the macro-economic factors that would make it a micro firm. If a firm does not meet the criteria for macro-economic factors, it cannot be considered a micro firm because it would not be able to meet any of the basic micro-economic factors.
Micro firms can be profitable. A firm can be considered profitable if its market prices are higher than the national average and the firm meets the macro economic factors listed above. or if its price is lower than the national average.
Micro firms have their disadvantages. If a firm is considered a micro firm because it is not meeting any of the macro-economic factors, then it will be difficult to increase sales and that the firm is less likely to expand its business. That is why it is important . . . . . . to determine which type of firm you have.