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Discuss a real business or hypothetical problems, in which you or someone in the management position at these two companies needed to consider both the macroeconomic and microeconomic factors to analyze these problems, so as to come up with some possible solutions

Economics Dec 09, 2020

Discuss a real business or hypothetical problems, in which you or someone in the management position at these two companies needed to consider both the macroeconomic and microeconomic factors to analyze these problems, so as to come up with some possible solutions. The companies being compared are Amazon and Carvana.

Expert Solution

Increased taxation on exports is a problem that requires consideration of both microeconomic factors and macroeconomic factors. Increased taxation implies an increase in the price of the products. For example, Carvana, which is a car retailer company, if the tax on exports increases, then they will have to increase the price of the car but in consideration of the effects on demand. This is because the increasing prices of vehicles may drastically reduce demand levels making their sales rate slow. Slow sales rates imply low incomes, which affect the Gross Domestic Product and Per capita income. So the company will have to consider increasing the price but to an extent that will not drastically affect the consumer demand. The same case applies to Amazon, which deals with electronics, among other products.

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