ARELLANO UNIVERSITY

Juan Sumulong Campus

2600 Legarda St., Sampaloc, Manila

SENIOR HIGH SCHOOL DEPARTMENT

School Year 2023-2024

DYNAMIC LEARNING PROGRAM (DLP)

Applied Economics

NAME:____________________________________ DATE:________________________

GRADE & SECTION: __________________________ TEACHER: ____________________

DLP 2

I. TOPIC: LESSON 6: VARIOUS SOCIO-ECONOMIC FACTORS AFFECTING BUSINESS

INDUSTRY

II. LEARNING GOAL: At the end of the lesson the student shall be able to:

a. Identify and explain the various socioeconomic factors affecting business and industry.

III. CONCEPTS:

SOCIOECONOMIC FACTORS AND HOW THESE AFFECT BUSINESSES AND INDUSTRY IN GENERAL

Business must pass through various socioeconomic factors and has to be affected by such factors in its
will of making money or profit by producing or buying and selling products in the form goods and
services.

Socio-economic factors include all transactions that the business has to interact with comprising land,
labor, capital, and technology. Business could not operate without a rented or owned real estate. It
could not function without employing laborers and providing investment.

Furthermore, Socio-economic factors are considerations about how the business itself operates from
within considering the capital, capacity of business, the sources or suppliers, the product to be
produced, and the services to be offered, among others.

Socio-economic Factors Affecting Business also includes the practice of consumer in using new products
and services. If households are experiencing poverty alleviation due to employment opportunities
adding more to their income, there is a great tendency for them to spend more money in the
marketplace demanding new products and services. Thus, businesses are doing well in the process
producing sustainable employment in return or even expansion of the same business or opening
another form of business catering not just the basic needs but somehow luxurious wants of consumers.
 ARELLANO UNIVERSITY

Juan Sumulong Campus

2600 Legarda St., Sampaloc, Manila

SENIOR HIGH SCHOOL DEPARTMENT

School Year 2023-2024

DYNAMIC LEARNING PROGRAM (DLP)

Applied Economics

The impact of the availability of raw materials or supply for business is another thing that affects
business. It is necessary to determine the investors’ needed capital and expected income. If raw
materials needed for supply become scarce there is a tendency for business to increase the price
employing the law of demand and supply to insure returns of investment.

In a larger industry it may include the government intervention on taxes or its policy on investment, and
the import export dollar transactions that the business maybe dealing with. If the policies of the
government are favorable to foreign trade and relations, then outside contacts and influence will be
promoted but if government adopts “nationalistic” policies, then it will close the country to foreign
influence which in turn affect the viability of local business and industries.

Other factors affecting business may include the following :

a. Payment of Government Taxes

Barangay, Municipal, or City permits, and real estate taxes, are paid in local government units while
value added tax, import-export duties, income taxes are due to national government. Taxes paid by
business enterprise are considered a component of production cost because it is added to capital outlay
of the business in the operation.

b. Mode of the International Trade

Some businesses especially the medium and large scale enterprises are usually affected by the dollar-
exchange rate in the economic transactions, because it may directly affect the exports and imports cost
of products which in turn may directly or indirectly affect production cost and the setting of the selling
price.

HOW ARE YOU GOING TO DETERMINE THE SOCIO-ECONOMIC STATUS OF CONSUMERS AS A FACTOR
AFFECTING BUSINESS OR INDUSTRY?

Consumer’s Behavior and Its Significance on Business

 ARELLANO UNIVERSITY

Juan Sumulong Campus

2600 Legarda St., Sampaloc, Manila

SENIOR HIGH SCHOOL DEPARTMENT

School Year 2023-2024

DYNAMIC LEARNING PROGRAM (DLP)

Applied Economics

The determination of the consumer’s behavior and their decisions on what to buy for consumptions is
another factor. Consumptions refer to the use of goods and services to satisfy the basic needs and wants
of consumers. Different socioeconomic classes will generally have different priorities, and this will affect
how consumers spend their money.

As investors ready to use capital for business, you must be able to look for a secured or feasible
consumer. The consumers are the persons who buy the products business offers for sale. It is therefore
imperative that we get to please the consumer, so he/she will buy from you instead rather from your
competitors. Once satisfied the buyer would be eventually become our regular customer.

Determining the Socio-Economic Status of Consumers and Its Effects on Industry

Wherever your small business or big business as an industry is located, there are going to be
socioeconomic factors that affect it, because social class, that is upper class, middle class, and lower
class individual status are attributable to the socioeconomic factors that determine the success and
failure of every business. Be it being an industry (big business) or a community investment (small or
medium size business).

The following are the main parameters of socio-economic status of consumers or buyers:

1. Income - when income is scarce, customers tend to restrict their spending to essential items.

2. Education/Skills - A society that has it that a well-educated and skilled population flourishes because
individuals are employable in well-paying jobs; and

3. Occupation - refers to the type of jobs people perform by virtue of their skills, experiences or choice.

A person who may have education or skills has a greater tendency to land a job or may acquire
permanent occupation that generates income. It is therefore important to consider the implications of
these socioeconomic factors on your business decision-making. Your decisions should be sensitive to the
prevailing economic conditions (ex. when pricing and stocking your business). Consumers have the
tendency to avoid expensive items during periods of economic failure. Moreover, customers in the
different social classes have different tastes and preferences. Be sure not to ignore the consequences of
these socioeconomic parameters in deciding what products you are going to produce or sell.
 ARELLANO UNIVERSITY

Juan Sumulong Campus

2600 Legarda St., Sampaloc, Manila

SENIOR HIGH SCHOOL DEPARTMENT

School Year 2023-2024

DYNAMIC LEARNING PROGRAM (DLP)

Applied Economics

IV. ASSESSMENT:

Directions:

A. Recall any businesses you know which are operating in your locality. Name at least 5 different kinds of
these businesses and write them down on the table below and indicate what product/s they are selling.

Name or Kind of Business Product Sold

BAKERY BREAD, PASTRIES , COOKIES

PHARMACY HEALTH PRODUCTS, MEDICINE
HARDWARE STORE TOOLS, BUILDING NECESSITIES
SARI – SARI STORE EVERYDAY NEEDS, SNACKS
FAST FOOD CHAIN FOODS , DESSERTS

B. Make you own evaluation how these businesses that you enumerated on the table above operate,
considering the following: a. production or supply capabilities of the businesses; and b. the socio-
economic status of their customers.

1. THE BAKERY HAS A CAPACITY TO PRODUCE GOODS SUCH AS BREADS, PASTRIES , AND

COOKIES AND OTHER BAKED GOODS . MOST OF THE CUSTOMERS ARE FROM ALL SOCIO –
ECONOMIC BACKGROUNDS
 ARELLANO UNIVERSITY

Juan Sumulong Campus

2600 Legarda St., Sampaloc, Manila

SENIOR HIGH SCHOOL DEPARTMENT

School Year 2023-2024

DYNAMIC LEARNING PROGRAM (DLP)

Applied Economics

2. THE PHARMACY HAS HIGH PRODUCTION AND SUPPLY CAPABILITIES , AND THE SOCIO
ECONOMIC STATUS IS DIVERSE, IT HAS A STRONG CAPABILITIES FOR ITS MEDICATIONS AND
HEALTH PRODUCTS, WITH A CUSTOMER BASE COVERING A WIDE RANGE OF SOCIO ECONOMIC
GROUPS.

3. THE HARDWARE STORE’S SUPPLY CAPABILITIES CAN VARY DEPENDING ON THE SIZE AND
LOCATION OF THE STORE. THE LARGER STORES MAY HAVE A BOARDER RANGE OF PRODUCTS
AND BETTER SUPPLY CHAINS. THE CUSTOMER INCUDES HOMEOWNERS AND CONTRACTORS
COVERING A WIDE SOCIO ECONOMIC SPECTRUM

4. SARI-SARI STORES’S SUPPLY CAPABILITIES DEPENDS ON THE LOCATION AND THE OWNERS
MARKETING STYLE, IT CAN COVER A WIDE RANGE SOCIO ECONOMIC STATUSES

5. FAST FOOD CHAINS SUPPLY AND PRODUCTION CAPABILITIES ARE HIGH , IT HAS A VERY
STRONG CAPABILITIES OF PRODUCTION BUT SOME MAY DEPEND ON THE LOCATION OF THE
FAST FOOD CHAIN IT CAN COVER A WIDE RANGE OF CUSTOMERS AND LARGE SOCIO
ECONOMIC GROUPS.