This culminates in the formulation of new rules and regulations concerning taxation as well as budgetary allocations. Government policy influences the main circulation of money in the economy. The annual budget shows opportunities and threats for our manufacturing industry. This is because it enables us to know the sectors of the economy that is being encouraged and those areas that are being discouraged. Through this, we can make decisions about how to distribute our scarce resources and also pay our obligations to the state in a way and manner that suits our best interest. There is also the need for our firm to position itself in a way and manner that will enable us to make the best use of opportunities and minimise the impacts of threats from the new policies that are put forward by the government.
This will enable us to plan affairs and steer the organization in such a way that will meet our targets and expectations in the best way possible. Perhaps the greatest and best aspect of government policy is the tax obligation. Typically, in the UK, a manufacturing company will pay between 19% and 30% of its revenue as tax.
There is the need to study the government’ s taxation policy in each year and from there, plan our taxation systems and processes. Microeconomics is about the elements of demand and supply and it studies trends and patterns in consumer decision-making in a given industry (Morgan, Katz, & Rosen, 2010). Microeconomics is important and essential because it will allow me and my team of decision makers to identify patterns in consumer behavior amongst our actual and potential consumers.
Based on this, we can find ways of offering our products to consumers and getting our consumers interested in our products so that we maintain a steady flow of demand. A fair understanding of the markets will enable us to get a good insight into the consumer behavior patterns and systems. This will be done through examining household purchasing patterns and behavior for our products and the products offered by our competitors.
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