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Velocity 2011
Velocity August 2011
Information economics the economic impact of ebusiness
Adrian Sims of BPP Learning Media examines a new topic in the 2011 CIMA certificate level
syllabus, fundamentals of business economics (examinable from October 2011), for which he wrote
the syllabus. This article is also relevant to the enterprise pillar of the professional qualification.
The 2011 syllabus for fundamentals of business economics contains a number of new topics, intended to
ensure the relevance of the syllabus to the management accountant seeking to make sense of the current
business environment and the impact of this upon decisions. These new topics include globalisation, the
global banking crisis that commenced in 2007, and structural debt and government policy.
One other new syllabus component is the impact of advanced communication technologies (ACT) on
industries. It requires candidates to illustrate the potential impact on prices and competition of ebusiness
and is accompanied by the indicative content increased competition and lower prices from the impact of
ebusiness on costs of information search and by enabling low or zero variable cost.
http://www.cimaglobal.com/en-gb/Thought-leadership/Newsletters/Vt-2011/Information-economics--the-economic-impact-of-e-business/
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complements. The video game market features a small number of console producers (Sony, Nintendo, and
Microsoft).
These consoles play the same video games as each other, but the console software means that software
producers have to develop a special version for each console. A version of the game software, say for a
Nintendo, cannot then be played on a Sony PlayStation. This has the effect of increasing the ability of the
platform owner to decide price and supply.
Conclusion
The new C04 syllabus requires candidates to apply economic analysis to the modern phenomenon of
ebusiness. If we reflect on the very sharp falls in the prices of motor insurance, recorded music and films,
we can accept that some of this is due to the huge reduction in the costs of searching for and producing
these.
Links
Specimen questions for C04
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