Report On The Gym Group

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EC4001/AP4001 Microeconomic Report Daniel Williams K1355702 Table of Contents Summary Report 1 Bestway Diversify As Co-op Try To Avoid Bankruptcy The Times, 18th July, Simon Neville Report 2 The Gym Group Look To Expand Throughout Europe The Telegraph, 13th August 2014, Oliver Duggan Report 3 Ryan Air’s Pursued Acquisition Of Cyprus Airways The Telegraph, 21st August, Oliver Duggan Conclusion References Summary In an effort to diversify its business, Sir Anwar Pervez’s cash-and-carry group, Bestway acquired The Co-operative’s 774-branch pharmacy business for £620 million. UK’s third largest pharmacy business fought off stiff competition from its rival firms, but resulted to the sale of the…show more content…
Open market operations, unlike closed markets, means any firm can venture into any business. This is the main reason why the company, in diversifying its operations, acquired the pharmacy business from The Co-op. Bestway sought to increase its profitability by diversifying its operations, thus increasing its sources of revenues. Competition is one of the major reasons why companies cut the prices of their products and services. If other companies were to charge high prices for their products, this would mean that by reducing prices, the company would attract more customers. Pricing of medicine in most cases does not depend on the available resources, but rather, a decision by the manufacturer. Pharmaceutical products do not obey the rule of marginal utility. One gets no additional satisfaction by consuming an additional unit of a drug. The majority of consumers only take prescription drugs whenever they need them and are prescribed by a doctor. This means there is low likelihood of people taking more drugs to satisfy their desire, just like other goods. According to the elasticity of demand law, a change in the quantity demanded leads to a change in price of the product. As such, if there were an increase in demand for pharmaceutical products, there would be an increase in the prices, while a decrease in these prices leads to a decrease in prices of pharmaceutical products. However, goods such as Geffen and Veblen do not obey the law of supply and demand, as
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