Question: Utilisingyour knowledge of the theory of the firm, provide a rationale for the Australian government'sJob Keeperpolicy being careful to distinguish between the short-run and the long-run and between the needs of small and medium sized businesses compared with large businesses.

My answer:

Business organizations are mainly divided into three types: sole proprietorship (such as local grocery stores), partnerships (such as Apple & MasterCard) and companies (such as Microsoft Corporation). In neoclassical economics, firm theory is a microeconomic concept that shows that firms exist and make decisions that maximize profits. Modern company theory sometimes distinguishes long-term motivations (such as sustainability) and short-term motivations (such as profit maximization). Therefore, regardless of the size of the company and the number of employees, it is operated in accordance with the above theories.

However, due to the unexpected pandemic of the new coronavirus, everything changed overnight. The economic impact of the coronavirus poses a major challenge to many businesses, such as restaurants, bars, gyms, schools, and universities, which are closed due to the spread of the virus in clusters; with the closure of national and international borders, even the tourism and aviation industries are facing enormous difficulties. Australia faces major public health and economic challenges. The decision of individuals to isolate or carry out activities to avoid the risk of infection, as well as government restrictions on enterprises and internal and external trade, has led to a sharp decline in economic production, resulting in a reduction in employment and working hours.

Due to the above reasons, various domestic and foreign commercial transactions were forced to slow down or shut down. For example, lobster was originally exported to countries around the world, but it could not be exported due to Covid-19 pandemic. In order to maintain the company's financial status, Lobster Companies cooperate with local supermarkets (such as Coles and Woolworths) to provide Australian people with prices that are cheaper than market prices. Therefore, the lobster industry can make a living without having too much inventory.

In order to allow everyone to continue to make ends meet, The Australian government began to provide two different schemes, including Job Seekers and Job Keepers in March 2020 to support companies and employees to retain jobs.

In this case, we will focus one Job Keeper. The following table is a short-term and long-term summary of Job Keeper, as well as a summary between small and medium enterprises and large enterprises.

Jobkeeper policy

Short-run rationale for small firms

• The policy offers subsidy to business that have experienced turnover and materials reduction
• The policy covers the possible risks experienced in small and medium business
• It promotes protection of property for the small and medium size enterprises (SMSEs)
• Jobkeeper policy protects of the insured venture

Long-run for large firms

• Thejob keeperpolicy will enable workers in large businesses to retain their jobs (Kaley, 2020)
• The policy helps large businesses to minimize the effects of economic damage by supporting the affected businesses
• The policy also supports the Australian economy preparing it for bouncing back when the situation normalizes
• The policy protects large business owners by preventing enterprise failures which could result in depression in the economy

Economic theory refers to the assumption that consumers and investors make relevant choices. They think of themselves as efficient machines. Economic theory also refers to ideas that tend to explain economic operations. According to economic theory, Australia has experienced a recession in 2020 due to the outbreak of the coronavirus pandemic. Therefore, despite the government's various measures to deal with this impact, the country's enterprises are still in a state of bankruptcy. In addition, the Australian government has taken measures such as movement restrictions to curb the spread of the corona virus. As a result, many companies remain closed because people cannot go to the market to facilitate physical purchases (Kaley, 2020). Other reasons for Australia's economic recession include the border closures of many countries. As a result, because investors cannot engage in international trade, economic operations are affected. The measures taken by the government effectively collected pre-tax payments from every employee. In addition, the Australian government has adopted a job seeker policy and cancelled pension contributions for small and medium-sized enterprises. The government's technology to control the Covid-19 pandemic can ensure that employees receive subsidy payments to alleviate their impact from the Covid-19 pandemic.

I am not sure the answers are on the right track, also I feel I missed something. Can you guide me, please?

Thanks for your time and help