Economics in the construction industry
A large construction firm has won a contract to build a luxury mixed used development including private and social housing units as well as commercial units. You are employed by this firm to evaluate the market and to find the best price for marble that will be used throughout the project for flooring and other uses in the building. Your employer has asked you, as their economic advisor, to explain how the price of marble can be justified. Furthermore, your employer wishes to understand the logic of government intervention in construction projects as they are planning to be involved in public sector bidding.
Report must use economic theory to analyze the above scenario and the report must include the following sections:
1- Draft An Explanation of the principles of economics that affect decision making by the seller and the buyer such as rationality, perfect information, self-interest, and equilibrium.
2- Explanation of the market price determination, i.e., the laws of supply and demand (with appropriate graphs). Add a real-life example such as the how the price of hand sanitizers changed during microeconomic theory in the UK.
3- Comparison of different types of goods and the elaboration of the concept of elasticity. Add another real-life example. No need to give prices for marble.
4- Critical evaluation of imperfect competition, marker failure and the need for government intervention. Add another real-life example in the UK.
Refer to conventional (or as commonly known “orthodox” microeconomic theory and “Keynesian” macroeconomics and demonstrate how different goods with different price elasticities behave in the market