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✗
 Marginal utility additional satisfaction obtained from
is the
utility or the
consumption

of an extra unit of a
product .
In this case ,
takeaway food are such as burgers .
law of

diminishing marginal utility states that the marginal utility of consuming successive

burgers will fall

.

The more the

consumptions of the same burgers indicates the less

satisfaction of consumer gained from each additional burgers -

This means

that when the

quantity demanded increases ,
the price that consumers

for
willing to
pay for each additional bwgw decreases Demand curve
takeaway
-

downward
burger will be
sloping from left to
right .

4ham air limitations for marginal utility theory for example . we

 assumed that
always utility or satisfaction can be
easily measured .
Also , the analysis

relies on the
rationality of consumers in making consumption division , but this cannot be

fully relied upon - The third one is the idea that vonsnmws have limited income ,

but it is
possible that income
may rises significantly over a
piiiod .

I
1
Indifference is all possible combinations of two products
showing
curve a curve

between which individual consumers is indifferent A budget line is line

an
showing
.

all the possible combinations of two products that a consumer would able to
purchase

with fixed pile and a

given income .

Bottles of wla
Takeaway food is an inferior food .
When the
price of takeaway food

less takeaway food be consumed causing budget

'

in - veases , van ,

,,, 1in ,
pin ,, inwards from µ, , +, , , , ,

i ; i
"
I 1
¥" B"
i I The movement from point A
> Takeaway represents
1 Bri to point G the
,
Qi 03 Qr food
SE
g TE

snbstition effect of price change which reduction consumed of take away food
, is in
quantity .

Movement from b to B shows the effort show in Wease falls

inwme in
consumption when into me
'

Negative SE is
greater than positive IT indicates that increases in
pine of takeaway food will leads to

reduction in consumption
•

Productive efficiency will be achieved when a firm operates at the minimum of its

average v04 mine . There are two aspects to

productive efficiency which are lost
eftivienvy
and trunnion I
ettivianiy
.

lost
efficiency is where the firms uses the most appropriate

combination of inputs of favors of productions .

Technical efficiency is where the

firm produces the maximum possible output from given inputs -

It Just Eat Takeaway

and hvnbhnd fun till this conditions ,

they will reach productive efficiency and

indirectly inwbasu the

profit potential , which will generate chance to
improve

their operation leading to

high quality growth .
 Dynamite efficiency is the greater efficiency that can results from improvement

in terminal or
productive efficiency over a period of time -

Attaining DE will involve

undulating investment in research and dwdtopment in mint Aativwy sartor ,

making survives to be more efficient and generate chance to verdure wsf

and develop new strives
'

Demerit good is good that has negative externalities but is

always overproduced

and overwnsnmed in the market due to information failure .

Information failure

present i} When consumer is unaware of external cost of takeaway food -

It is the faut that wnsnmdr of takeaway food is unable to pnoldss the

long run health problems they could have from the unhealthy diet '

Allo batik efficiency describes the extent to which allocation of resources in an

economy

matches wnsnmw preference . It is the point where market priv equals to the marginal

lost .

To consider whether all ouative

efficiency is anhiared , all costs should take into amount .

This includes private host of firms like Just Fat Takeaway and hvnbhnb .
Given that meat
,

delivery is traditionally made rising motorised vehicles that creates polluting emmisions .

These emmisions are an external cost because it is paid by third parties , and thus not

amounted for market price

.

A
monopoly states that there is a single firm which wntwl the supply of products

monopoly firm
A its market to
in a market or
industry can utilise power disadvantage
.

consumer
by vols tinting output , whim them to inner Asu in market
prices .
This

will leads to an inefficient allocation of resources , which is market failure .

☆

Market failure occurs when free market misallocate resources ,

resulting in suboptimal outcome .

This van be result of a

divwgenie between
marginal private vast and marginal social

lost
'

The market vosf and price of food deliveries in nudes private host of firms like

Just Fat Takeaway and hvnbhnb .

however the marginal external Wsf of the motor

vehicles
pollution is difficult to estimate but would be somewhat in
excess of

simple private cost

.

Therefore , when market price only vi. flirts private host of

manufacture , the pine is

always less than lost to
society .

Misallocation of will overproduce private

resources may ovlnv because they their

host that i} town than marginal host The demand for

social increase the services during wid 19
.
-

pandemic would lead to them bring responsible to greater market failure

.

The pollution contributed by the whines of

%
Msu food duvivwy Whales externalities which
A
Msu
P
P, - -
É '
-
1
, nap ,
mean social host is greater than private
'
i. a
Prg . _ _
-

I -
•
I
lost .
The dead Waight welfare loss is
B I
1
i Ev
-

-
-

- -
- -
t
I 1 this loss in social welfare arises when the
1 I

I
1

1 I Ms , presences of externality moves the market

o I I
>
At Qr llnnntity away from optimum position
.

It a firms only consider its private wst IMPUI , the equilibrium with be at 72

with Pr and Qv -
Thu
preserves of externalities causes marginal vast inner IMS bit to

be MPU and the dead will be After

above
wright loss
-

of distance travelled by surviving

The sharing ttvhvotogy will help ] to radula the same

amount of customers , which reduces the externalities and directly reduces the marginal

cost from MSU , to Nish .

The size of deadweight loss will reduce to Bleu .
 Organic growth occurs when a firms grows internally ,
by reinvesting its own
profits and

and markets of the firm

developing the existing resources .

The investment in the skill sets of the workforce at hubbub would enable the

workforce to work efficiently '

Nuove efficient workers will be able to

existing
more

the needs of a for great number of consumers with new more

process

innovative products and services •

Thor will increase Crwbhnb reputation and

th
organic go
- .

price elasticity demand of

The food by 7h51 Eat Takeaway and hvnbhnb

than I Prien elastin demand Nina elastin demand is

greater which is
.

is s

price of food delivery lead than proportionate

devvease in will to more
when a

demanded for takeaway food total is found

quantity
revenue
by
-

inmate in

demanded 14h :P Q ) Total revenue

multiplying price changed by quantity
. ✗

of
reviving fixed percentage price of
there are a volume
will trnuvease because

sales that has a greater total value than before price decreases .

TR doesn't profit will increase lack of information

Increasing mean ; as we are

of the wst when the quantity of delivery

increases
.

total profit is calculated

by

total revenue minus total lost

-
 limiting pricing strategy is the selection of pile that is below the profit maximising

A firm wants discourage firms from This will

price to new
entering an
industry
.
-

helps to
protest the wmpetitiue position of the firms that adopt this strategy .

In 2019 Just Eat food

. was
operating as a
monopoly in
delivery market .

The Just
strategy involved Eat to change a price truer than estimated average

cost of potential entrant of new firms . This would

protect Just Eat and grow its

market share without competition with new firms ur rival firms "
however this

required Just Eat to Salvi file their profits in short run to prevent entry of new fivers .

Merger is a
process where two or more firms wine together under one management .

it will Just
In this vase , be horizontal
integration as
Eat Take away and ↳ ✓ nbhnb

at
avb the same stage of production .

The
advantage of this
mevgw will be increases the give of its operation .
The

larger swale of winged wup nation inn eased their combined access to economies of

slates The winged firms believe it benefit from

sharing technology to increase
can
.

ettiviinuy and reduce

delivery distances .
The
gain of EOS will allow average host of

production to fall and profits and productive efficiency to

•

in wusses

The merged firm will be able to make efficient savings by streamlining

duplicated tasks between two firms in short turns '

however ,
only if
thou of duplicated fast and vonsidwed
streamlining tasks is attentive , it

an advantage
'

It tho
duplicated tasks takes too this win leads to
as
long ,

✗ -
efficiency and loss of profits .

In wnvlrnsion will Just Eat

, the
mwgw be an advantage to
Takeaway
especially urban so hvnbh.nu is also a snus start firm .
 Merger is a
process where two or more firms wine together under one

management Vertical integration

'

is where two or more firms in different

stage of production process join together If this is

going back to earlier
.

an

stage of production process , snvh as tyre producing vonntry taking over

mbbw plantation i this is known as bnvkw and vertical integration .

If it is

going towards a lntw stage of production process , such as a car producer

taking over a chain of petrol stations and garages to nut as distributors

of vehicles this forward
is known as vertical
interrogation
,
'

External growth auniaved

through virtual intivg ration can leads to

Monomials of sunlit in the areas of shared could

business practice This
-

lead to www
nvowayu cost of pvodnvtiun .
Vertical integration is

particularly preferable it control of the

supply chain is important
to firm -

For aircraft manufacturer mint

example , an
pvwunasu a

component hnpplinr This is important hwan Sn it ensures

certainty
.

and
continuity of supply for the business while
controlling quality
and costs of my inputs vital to firm
The
major disadvantage of vertical integration is the
potential for
disnvononnes of scales
leading to
increasing average of production
"
,
hosts -

Disavow tries of scale would result Iron communication problems

between the extended departments of firms potentially

larger

Opava tiny with different home languages in different time tones .

This
could result in
inefficiency i
wastage ,
ultimately hiynw average cost of

production ,
leading to reduced profit .

Conglomerate interrogation is a merger between two firms which are

operating
in a
completely different market rather than in dittwvoint stages of the same
market .

Although it may appear illogical .

it has the benefit of spreading the

risks in dittowtnt markets through diversification For example the

brewing
'

hninness of
company hninness diversified into publishing i
producing Book Records .