Long-Term Investment Decisions

Long-Term Investment Decisions
Student:
Professor:
Course title:
Date:
Long-Term Investment Decisions
Plan that could be followed by managers in the company in expectation of increasing prices
A plan that the managers of low-calorie, frozen microwaveable food corporation may follow in expectation of increasing prices specifies a pricing strategy which would not have any impact on how the customers perceive and purchase the company’s products. Such demand, as Coglianese et al. (2010) pointed out, is usually seen in situations wherein the products are essential and end users are not able to do without them, although not in the case of the products provided by microwaveable food company. It is worth mentioning that the demand function for microwaveable food is mainly dependent on the product’s price, the substitute products, income of the end users, as well as advertisement overheads. The elasticity and demand function show that the market for microwaveable foods is one that has a monopolistic competitive tendency.
The demand for the products produced by microwaveable food company is not highly elastic. The company needs to ensure that its products remain as inelastic as possible, and in this plan outline, it can achieve that by differentiating its products from similar products provided by competitors. This will make the company’s products somewhat different from other similar products in the marketplace and consumers may not easily substitute the company’s products with others (Ozyasar, 2011). Through effective product differentiation, the company may be able to gain a larger market power and market share, which will in turn boost the company’s bottom line in terms of profitability.
Effects of government policies on employment and production
The main effect of government policies on employment as well as production is that it limits and in some situations it promotes production which is of great importance in creating jobs for the expanding economy. Amy (2011) noted that government policies may serve to limit or enhance growth; these policies could intervene and influence the production process positively or negatively. For instance, assuming that a particular product is harmful and detrimental to the citizens of the country, the government will regulate the production of that particular product to limit its production for the purposes of protecting its citizens/the public. In so doing, involvement by the government would serve to reduce the production, which will in turn affect employment in some way by reducing employment in the industry in which that product was being produced (Amy, 2011). Conversely, if a certain product is beneficial to the public, the government may promote its production, for instance, by offering subsidies or financial support, which would in turn increase the manufacturing of that product. As a result, the production of that product would increase and more employment opportunities would be created in that sector (Amy, 2011). Through such government policies, Wales (2010) pointed out that the operations within the market economy are set to reflect not just the customer needs, but also the greater good of the country.
The potential effect that governm...