Intel Corporation and the Effects of Economics

Intel Corporation and the Effects of Economics

Economics is defined as is the social science that studies the production, distribution, and consumption of goods and services. It primarily deals with the exchange of value and that labor or human effort is the source of all value. The field may be divided in other ways, most commonly microeconomics vs. macroeconomics. Microeconomics examines the economic behavior of individual units, including businesses and households, and their interactions through markets, given scarcity and government regulation. Macroeconomics examines an economy as a whole "top down” with a view to understanding interactions between the broadest aggregates such as national income and output, employment and inflation and broad aggregates like total consumption and investment spending. Econometrics is the application of statistical techniques to measuring economic phenomena.

Scarcity suggests all things in the world are in finite supply. People therefore have to make choices. The concept of value is central to economics. Objective value is the equilibrium free market price. Subjective value arises from individuals' preferences, and so influences economic agents' behaviors. In microeconomic theory supply and demand attempts to describe, explain, and predict the price and quantity of goods sold in perfectly competitive markets. It is one of the most fundamental economic models and it is used as a basic building block in a wide range of more detailed economic models and theories. Price is the going rate of exchange between buyers and sellers in a market. Price theory charts the movement of measurable quantities over time, and the relationship between price and other measurable variables.

Porter 5 forces analysis is a framework for business management developed by Michael Porter in 1979. It uses concepts developed in Industrial Organization economics to derive 5 forces that determine the attractiveness of a market. It is also known as FFF, Fullerton's Five Forces. Porter referred to these forces as the microenvironment, to contrast it with the more general term macro-environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace. The first force is called bargaining power of customers, the second is the bargaining power of suppliers, the third on is the threat of new entrants, the fourth one is the threat of substitute products, all in which influence the fifth force, the level of competition in an industry.

Market structure or market form describes the state of a market with respect to competition. Perfect competition is when the market consists of a very large number of firms producing a homogeneous product. Monopolistic competition which is also called competitive market, where there are a large number of independent firms which have a very small proportion of the market share. Oligopoly is when a market is dominated by a small number of firms which own more than 40% of the market share. Oligopsony is when a market is dominated by many sellers and a few buyers. Monopoly is when there is only one provider of a product or service. Natural monopoly is a monopoly in which economies of scale cause efficiency to increase continuously with the size of the firm. Monopsony is when there is only one buyer in a market.

Intel Corporation was founded in