Evaluate the Impact of Changes in the Economic Environment on a Selected Business

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Evaluate the impact of changes in the economic environment on a selected business – D1 After various changes to the economic tax and interest rate, CPHP have conducted and compiled research into current public spending. The results show that there has been a dramatic reduction in the level of public spending in the UK. The changes in economic environment will affect a business, the profit of the business will be affected because its affect the price and income of a business, which are the main aspect of a business. If Tesco decides to change the price of their goods, for example; the price of their doughnut in 2009 was 5 pieces for a pound, a reasonable price for students but with the economic environment it affected everything with the introduction of VAT from 17.5% to 20% made the price of the doughnut to now cost around 1.30p the change is affordable for some people but for other people it is not affordable. The reality of this economic environment is that when the price change and it becomes higher, consumers get less happy and this affects our range of time of buying certain products.

The article above shows how the economic environment tax income is affecting prices as a whole, the price of cigarettes and alcohol in going to increase. This will affect Tesco because this is where they make most of their sales from. They have almost to sessions for both cigarettes and alcohol. When these products increase, it means their sales on these products will reduce because not a lot of customers will still be buying these products. Another policy that will affect the business Tesco is the fact their employee can’t work more than 39 hours, this policy will have impact on the business because they will have to recruit more workers and especially for the big 24 hours Tesco. This will affect Tesco income because it will increase the rate of their outcome because they will spend a lot of money on paying their workers. Another important economic environment impact will...
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