efm case study

7/26/2019 Efm Case Study

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Sarvajanik Education Society

S.R.Luthra Institute Of Management

Module V Case Study

Semester I !"#$ Class % &'(

Economics for Managers (!)"""($ *aculty % +elna, +astoor

&

Re-ort on

Module V Case Study resentation

Su/mitted /y0 1rou- no0 #$

Sr 2o0 Enrolment num/er 2ame Roll.no

1 158050592010 Nilam Bane 03

2 158050592011 Beena Thankachan 04

3 158050592029 Krupal Dixit 13

4 158050592036 Jiten Gheea 15

5 1580505920!5 "rachi "atel 33

6 158050592088 #inc Th$ma% 44

! 158050592096 &har$n #a'u 4!

Su/ject0 Economics for Managers (!)"""($

Su/mitted to0

Mrs. +elna, +astoor

S. R. Luthra Institute Of Management3!"#


2/15

Case3)

2ear3Em-ty Restaurants and Off3season Miniature 1olf

(a)e $u e)er *alke+ int$ a re%taurant ,$r lunch an+ ,$un+ it alm$%t empt- .h/ $u miht ha)e

a%ke+/ +$e% the re%taurant e)en $ther t$ %ta $pen- t miht %eem that the re)enue ,r$m the ,e*cu%t$mer% c$ul+ n$t p$%%il c$)er the c$%t $, runnin the re%taurant

n makin the +eci%i$n *hether t$ $pen ,$r lunch/ a re%taurant $*ner mu%t keep in min+ the

+i%tincti$n et*een,ixe+ an+ )ariale c$%t% an $, a re%taurant% c$%t%the rent/ kitchen e7uipment/

tale%/ plate%/ %il)er*are/ an+ %$ $nare ,ixe+ &huttin +$*n +urin lunch *$ul+ n$t re+uce the%e

c$%t% n $ther *$r+%/ the%e c$%t% are %unk in the %h$rt run .hen the $*ner i% +eci+in *hether t$

%er)e lunch/ $nl the )ariale c$%t%the price $, the a++iti$nal $$+ an+ the *ae% $, the extra %ta,, are

rele)ant The $*ner %hut% +$*n the re%taurant in the lunch time $nl i, the re)enue ,r$m the ,e* lunch

time cu%t$mer% ,ace% t$ c$)er the )ariale c$%t

n $perat$r $, a miniature$l, c$ur%e in a %ummer re%$rt c$mmunit ,ace% a %imilar +eci%i$n

Becau%e re)enue )arie% %u%tantiall ,r$m %ea%$n t$ %ea%$n/ the ,irm mu%t +eci+e *hen t$ $pen an+

*hen t$ cl$%e :nce aain/ the ,ixe+ c$%t%the c$%t% $, uin the lan+ an+ uil+in the c$ur%e are

irrele)ant makin thi% +eci%i$n The miniature$l, c$ur%e %h$ul+ e $pen ,$r u%ine%% $nl +urin

th$%e time% $, ear *hen it% re)enue excee+% it% )ariale c$%t%
http://economicskey.com/fixed-and-variable-costs-5962http://economicskey.com/fixed-and-variable-costs-5962


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S4MM&R5

Durin lunch time re%taurant% are alm$%t empt +ue t$ thi% n$* it% the $*ner% +eci%i$n *hether t$

keep the re%taurant% $pen $r cl$%e :*ner ha% t$ keep a +i%tincti$n et*een )ariale an+ ,ixe+ c$%t#e%taurant% ,ixe+ c$%t inclu+e rent/ kitchen e7uipment/ plate% that are $in t$ $ccur e)en i, the

re%taurant i% cl$%e+ an+ )ariale c$%t inclu+e %ta,, *ae%/ ,$$+ etc that *$ul+ e incurre+ $nl *hen

the re%taurant% are $pen B %huttin +$*n the ,ixe+ c$%t *$ul+ n$t e re+uce+ ut the )ariale c$%t

can e a)$i+e+/ the re%taurant %h$ul+ e $pene+ up in lunchtime $nl i, the re)enue c$)er% the )ariale

c$%t &ame pr$lem i% ein ,ace+ $perat$r $, miniature $l, c$ur%e a% re)enue +i,,er% ,r$m %ea%$n

t$ %ea%$n a% ,ixe+ c$%t inclu+e uin lan+ / %ettin up c$ur%e% are irrele)ant in makin thi% +eci%i$n/

%$ here al%$ it %h$ul+ e $pene+ *hen re)enue excee+ )ariale c$%t

*i6ed cost; ,ixe+ c$%t% are th$%e c$%t that +$ n$t )ar *ith the 7uantit $, $utput pr$+uce+ ixe+

c$%t% are incurre+ e)en i, the ,irm pr$+uce% n$thin at all ixe+ c$%t inclu+e% rent/ a+)erti%in/

in%urance/ e7uipment/ rent etc

Varia/le cost;


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Conclusion

&$ here *e c$nclu+e that the empt re%taurant% %h$ul+ remain $pene+ $nl i, the re)enue i% hiher

than the )ariale c$%t T$ maintain the $$+*ill $, re%taurant it %h$ul+ e $pene+ ,$r *h$le +a th$uh

e)en the re)enue i% le%% than a% c$mpare+ t$ the reak,a%t an+ +inner time , the a)erae re)enue i%

hiher than the a)erae )ariale c$%t then it %h$ul+ +e,initel re%ume hi% %er)ice $n *h$le +a a%i%

&ame *a miniature $l, c$ur%e %h$ul+ e $pen ,$r u%ine%% $nl i, the re)enue $, time% $, ear

excee+% it% )ariale c$%t


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Case3(

78o 9ig Shifts in &ggregate demand0 7he 1reat +e-ression and :orld :ar II

t the einnin $, thi% chapter/ *e e%tali%he+ three ,act$r% a$ut ec$n$mic ,luctuati$n% l$$kin at

+ata %ince 1965 @et% n$* take a l$ner l$$k at A& c$n$mic hi%t$r iure %h$*% +ata %ince 19100

$n the percentae chane in real GD" $)er the pre)i$u% 3 ear% n an a)erae 3 ear peri$+/ real GD"

r$*% a$ut 10 per cent a it m$re than 3 per cent per ear The u%ine%% ccle/ h$*e)er/ cau%e%

,luctuati$n% ar$un+ thi% a)erae T*$ epi%$+e% 'ump $ut a% ein particularl %ini,icantC the lare

+r$p in real GD" in the earl 1930% an+ the lare increa%e in real GD" in the earl 1940% B$th $,

the%e e)ent% are attriutale t$ %hi,t% in areate +eman+

The ec$n$mic calamit $, the earl 1930% i% calle+ the reat +epre%%i$n/ an+ it i% ,ar the lare%t

ec$n$mic +$*nturn in A& hi%t$r #eal GD" ,ell 2! per cent ,r$m 19291933/ an+ unempl$ment

r$*% ,r$m 3 per cent t$ 25 per cent t the %ame time/ the price le)el ,ail 22 per cent $)er the%e 4

ear% an $ther c$untrie% experience+ %imilar +ecline% in $utput an+ cri%e% +urin thi% peri$+

c$n$mic hi%t$rian% c$ntinue t$ +eate the cau%e% $, the reat +epre%%i$n/ ut m$%t explanati$n%

centre $n a lare +ecline in areate +eman+ .hat cau%e+ areate +eman+ t$ c$ntact- (ere i%

*here the +i%areement ari%e%

an ec$n$mi%t% place primar lame $n the +ecline in the m$ne %upplC r$m 19291933/ the

m$ne %upp ,ell 28 per cent % $u ma *e call ,r$m $ur +i%cu%%i$n $, the m$netar %%tem/ thi%

+ecline in the m$ne %uppl *a% +ue t$ pr$lem% in the ankin %%tem % h$u%eh$l+% *ith+re*

there m$ne ,r$m ,inanciall %hak ank% an+ anker% ec$me m$re cauti$u% an+ %tarte+ h$l+in

reater re%er)e%/ the pr$ce%% $, m$ne creati$n un+er ,racti$nal re%er)e ankin *ent in re)er%e The

,e+ / mean*hile/ ,aile+ t$ $,,%et the%e ,all in the m$ne multiplier *ith expan%i$nar $pen market

$perati$n% % a re%ult/the m$ne %uppl +ecline+ an ec$n$mi%t% lame+ the ,e+% ,ailure t$ act ,$r

the reat +epre%%i$n% %e)erit

:ther ec$n$mi%t% ha)e %ue%te+ alternati)e rea%$n% ,$r the c$llap%e in areate +eman+ $r

example/ %t$ck price% ,ell a$ut 90 per cent +urin thi% peri$+/ +epre%%in h$u%e h$l+ *ealth an+ there

c$n%umer %pen+in n a++iti$n/ the ankin pr$lem% ma ha)e pre)ente+ %$me ,irm% ,r$m

$tainin the ,inancin the *ante+ ,$r in)e%tment pr$'ect an+ thi% *$ul+ ha)e +epre%%e+ in)e%tment

%pen+in t i% p$%%ile that all the%e ,$rce% ma ha)e acte+ t$ether t$ c$ntract areate +eman+

+urin the reat +epre%%i$n

The %ec$n+ %ini,icant epi%$+e in ,iurethe ec$n$mic $$m $, the earl 1940%i% ea%ier t$ explain the

$)i$u% cau%e $, thi% e)ent *a% .$rl+ .ar 2 % the Anite% &tate% entere+ the *ar $)er%ea%/ the

,act$rial G$)ernment ha+ t$ +e)$te m$re re%$urce% t$ the militar G$)ernment purcha%e% $$+% an+

%er)ice% increa%e+ alm$%t ,i)e ,$l+ ,r$m 19891944 Thi% hue expan%i$n in areate +eman+ alm$%t

+$ule+ the ec$n$m% pr$+ucti$n $, $$+% an+ %er)ice% an+ le+ t$ a 20 per cent increa%e in the price

le)el alth$uh *i+e%prea+ G$)ernment price c$ntr$l% limite+ the ri%e in price%E Anempl$ment ,ell,r$m 1! per cent in 1939 t$ a$ut 1 percent in 1944 the l$*e%t le)el in A& hi%t$r


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Main arameters of Case

+e-ression0

+epre%%i$n i% a %u%taine+/ l$n term +$*nturn in ec$n$mic acti)it in $ne $r m$re ec$n$mie% t i%

m$re %e)ere +$*nturn than an ec$n$mic rece%%i$n/ *hich i% %l$*+$*n in ec$n$mic acti)it $)er the

c$ur%e $, n$rmal u%ine%% ccle

Depre%%i$n% are characteriFe+ their lenth/ an$rmall lare increa%e in unempl$ment/ ,all% in

the a)ailailit $, cre+it/ %hrinkin $utput a% uer% +r up an+ %upplier% cut ack $n pr$+ucti$n an+

in)e%tment/ lare numer $, ankruptcie% inclu+in %$)erein +et +e,ault%/ %ini,icall re+uce+

am$unt% $, tra+e an+ c$mmerce/ a% *ell a% hihl )$latile relati)e currenc )alue ,luctuati$n%

&ggregate +emand0

reate +eman+ i% the t$tal 7uantit $, $$+% an+ %er)ice% +eman+e+ in an ec$n$m at a i)en pricele)el t i% repre%ente+ the areate+eman+ cur)e/ *hich +e%crie% the relati$n%hip et*een price

le)el% an+ the 7uantit $, $utput that ,irm% are *illin t$ pr$)i+e

reate +eman+ i% the sum of theconsum-tion e6-enditure; investment e6-enditure;

government e6-enditure an+net e6-orts.

:orld :ar II0

.. $r ..2E/ al%$ kn$*n a% the Second :orld :ar/ *a% a l$al *ar that la%te+ ,r$m )


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Summary

n thi% ca%e/ it i% all a$ut A& ec$n$mic hi%t$r Three ke ,act% a$ut ec$n$mic% ,luctuati$n ha)e

een lihte+;

).$ Economics fluctuations are irregular and un-redicta/le.

(.$ Most macroeconomic ?uantities fluctuate together

=.$ &s out-ut falls; unem-loyment rises

Durin 1930%/ real GD" +r$ppe+ larel an+ in 1940%/ the real GD" increa%e larel Thu%/ areate

+eman+ attriute+ t$ %hi,t% The Great Depre%%i$n *a% the lare%t ec$n$mic +$*nturn in A& hi%t$r

(ere/ real GD" ,ell (@A,r$m )


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n$ther cau%e $, thi% e)ent *a% .$rl+ .ar 2 A& entere+ the *ar $)er%ea%C the e+eral G$)ernment

ha+ t$ +e)$te m$re re%$urce% t$ the militar G$)ernment purcha%e% man $$+% an+ %er)ice% ,r$m

) The areate +eman+ expan+e+ huel alm$%t +$ule% $, the ec$n$m% pr$+ucti$n $,

$$+% an+ %er)ice% an+ le+ t$ (#Aincrea%e in price le)el

(ere/ unem-loyment fell from )@A in ) and that 8as the lo8est level in

4S history


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Conclusion

The %t$ck market cra%h $, 1929 marke+ the %tart $, the reat +epre%%i$nC the m$%t *i+e%prea+ in

m$+ern hi%t$r/ *ith e,,ect% ,elt until the %tart $, .$rl+ .ar 2But in .$rl+ .ar 2/ $)ernment u

man $$+% an+ %er)ice ,r$m militar/ an+ then $)ernment help% in +ecrea%in the unempl$mentrate

at the extent $, the 8


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Case =

7he recession of (""! to (""

efm case study

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