BUSINESS ECONOMICS COURSEWORK Essay Example | Topics and Well Written Essays - 2000 words - 1

BUSINESS ECONOMICS COURSEWORK - Essay Example In this labor contract, wages and benefits are specified. However, Bhagat is free to choose the quantity of labor it employs. Bhagat has announced a $3 price increase for its machine parts. This figure represents the projected $3 increase in labor costs due to its new union contract. It is Gina’s responsibility to evaluate this announcement. Many firms use cost-plus pricing for supply contracts as the changes in cost-plus contracts are more likely to become a responsibility of the purchaser of the product. Thus, fluctuations and volatility of labor costs, price for fuel and other resources are the risks of the purchaser of the product rather than supplier/manufacturer. Cost-plus pricing mitigates the risks of the supplier/manufacturer of the product and therefore, makes him feel more relaxed and less motivated to reduce costs associated with production of the product. Purchaser of the product has to pay for these costs, which incurs increase of the price of the product sold and therefore either decreases his mark up or weakens his competitive position on the market. Personal video recorders (PVRs) are digital video recorders used to record and replay television programs received from cable, satellite, or local broadcasts. But unlike VCRs, which they replace, PVRs offer many more functions, notably the ability to record up to 80 hours of programs and easy programming. A PVR consists of an internal hard disk and micro processor. After the owner installs the hardware, the PVR downloads all upcoming TV schedules to the hardware via a phone or cable connection. Users merely enter the name of the show(s) they want recorded and the system finds the time and channel of the show and automatically records it. Users must subscribe to a cable or satellite system if they wish to record programs off these channels. Besides ease of programming and much larger recording capacity than video tape,