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Microeconomic Analysis - Essay Example

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Energy is a major cost driver in the businesses and households. Cindy has realized the existence of a business opportunity in starting…
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Microeconomic Analysis
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Microeconomic Analysis

Download file to see previous pages... This leads to creation of awareness of the product and thus an increase in the demand.
The cost of other substitutes: electricity is the major substitute to solar panels (Denholm 2007). The high cost of electricity as compared to solar panels is pulling away many individuals to consumer the solar panels.
Between 2006 and 2011, Europe represented more than 70 percent of global solar installations. In 2008 and 2010, the region made up roughly 85 percent of installations, the supply of solar panels therefore is a major factor in determining whether to venture into the contract business (Denholm 2007). Supply in the number of commodities the suppler is willing to sell at a given period of time. With the government intervention in the supply of the commodities the supplies have a ready market to supply to. This therefore enhances the demand to supply the commodity. The willingness of individual households and businesses to install solar panels is a major boost to the willingness of the suppler to produce the goods. Then levels of inventory have remained low in the recent past and therefore the venture is a great opportunity for Cindy.
The region has expressed a huge market for solar panels with the government subsidy and the high cost of substitutes then the business is most likely to be a profitable venture for Cindy (Denholm 2007). I recommend her to venture into contract installation of solar panels and will definitely get the return on ...Download file to see next pagesRead More
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