SOCIO-ECONOMIC FACTORS AND THEIR EFFECTS ON BUSINESS AND INDUSTRY

1. CONSUMER AND HOUSEHOLD

CONSUMERS are defined as individuals or businesses that consume or use goods and services.
Customers are the purchasers within the economy that buy goods and services, and can exist as consumers or
alone as customers.

Consumer often determines what kind of products and services are to be produced. For businesses, many
products and services are constantly being innovated to meet the ever-growing demand from consumers.
What are the economic roles of consumers?

a. Research and development efforts are driven by consumer reactions to existing sellers' shortcomings
and by consumer expectations for future products.
b. Consumers create jobs through their purchases. Consumption of locally made products, for example, will
increase employment if demand rises

HOUSEHOLDS consist of one or more people who live in the same house and share meals .
What are the economic roles of households?
Businesses use economic resources like land, labor, capital, and entrepreneurship to create goods and
services. In addition, consumption, which is the act of purchasing goods and services, is also influenced
by the household sector.
Households contribute to banks by investing and saving.
Households are also considered to be taxpayers, and their money is used by the government for a
variety of purposes, including building infrastructure, paying the national debt, and hiring people to do
government work, such as sweepers and traffic aids, public officials, policemen, public school teachers,
firemen, and sanitary inspectors
Household to the importation/exportation of goods from/to the rest of the world. Some may see this as a
drawback, as importation consumes valuable financial resources. However, it can also establish good
rating relations with other countries

2. SUPPLIER AND INVESTORS

 A Supplier is an entity that provides goods and services to another organization
Suppliers provide the transportation of those materials. Suppliers provide a company with the services it uses in
providing goods and services its customer. Without a solid relationship with its suppliers, a company can not
offer its own customers a consistently high quality product or service.
 INVESTOR
• Is an individual that puts money into an entity such as a business for a financial return.
Investor
 are entities that act as financial sources of businesses intending to gain profits. They lend money to
business owners and expect the owners to return the money with interest within a particular period. It
may be either private individuals or business entities
3. GOVERNMENT.
The government's primary duty is to provide basic social services to its citizens, such as health care, free
education, and security. To do so, the government must raise money to fund its functions.
As a result, the constitution mandates that the government collect fees from individuals, businesses, and the
like.

Taxation is the process of collecting fees .

Why is there a government in one territorial Taxes are perceived as the "lifeblood" of the
jurisdiction? government, which was established by the people
to provide them with basic necessities such as food,
shelter, and housing as well as peace and order
and justice.
What is the purpose of collecting taxes to the The primary purpose of taxation is to raise
people? revenue from all possible sources to support
government expenditures and services, and to
promote the general well-being and safety of its
citizens. People's lives will be improved by giving
them free basic services in the short run and by
trying to alleviate poverty in the long run as a result
 of the government's efforts. Taxation is also
designed to equitably distribute wealth to the
citizens of the country and to uplift social conditions
(for all types of taxes) or to protect new
industries( as in dumping taxes).
What will happen if tax is not imposed? Taxation is the most important of the state's
inherent powers because before police power and
eminent domain can be effectively and efficiently
exercised, it is important to have a government to
which the people give habitual obedience. As a
result of the absence of taxation, the estate would
not be able to pay for its expenditures.
Consequently, there will be no government.

4. INTERNATIONAL TRADE

International trade
 is the exchange of goods and services between two countries.
 Trade gives consumers and countries globally the opportunity to gain exposure to goods and services
available in their own countries or it will be more expensive domestically.

What is now the role of international trade in the economy?

a. The role of international trade in the economy is to expand existing markets and to apply both comparative
and absolute disadvantages where countries benefit, such that opportunity cost is minimized. Comparative
advantage is an economic concept in which an economic actor can produce certain good or service at a lower
opportunity cost than other actors.

b. International trade also allows industries to achieve economies of scale. Economies of scale is achieved
when a company can increase its production output while keeping input costs to a minimum.

ACTIVITY

Let's try to understand the various socio-economic factors that could have an impact on our
business/industry through this situation .

Mang Juan, an international fast-food business, wants to expand its business in Catanduanes. With the
help of a feasibility study, about 90% of the households have positive feedback on putting up their fast-food
chain in SAUD Market. Mang Juan, on the other hand, despite the figure is still unsure if it will continue to
operate its fast-food chain in Catanduanes due to different government restrictions in food industries since the
government has mandated that food industry can only accommodate 50% capacity for dine in customers.
Second, only adult customers are allowed to enter, and the younger ones are restricted to do so. In addition,
Mang Juan's main suppliers are in the City, which makes it extremely difficult to transport raw materials due to
the limited transportation route available in the city. Lastly, Mang Juan is not the only restaurant that offers
similar meals within the vicinity. Mang Juan also considers the poverty incidence in Catanduanes and have
found out that 34% of the total population belongs to a poor family

Process questions:

If you were the owner of Mang Juan, would you continue to operate your fast-food chain in Catanduanes
despite several socio-economic factors that could affect your new business venture? Why and why not? Cite the
different economic factors.