Assignment On Economics
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Added on 2020-02-12
Assignment On Economics
Added on 2020-02-12
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ECONOMICS1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3(i) Use of supply and demand analysis in determination of price of lead...................................3(ii) Negative externalities which arises from the consumption of saturated food.......................6CONCLUSION................................................................................................................................9REFERENCES .............................................................................................................................112
INTRODUCTIONEconomics is regarded as the discipline that can be defined in various manner. It isregarded as the study of scarcity. Along with this it includes the manner in which the individualmake use of resources or the study which is relating with decision making. In other words it canbe referred to as the theories, principles and models that are dealing with the manner in which theprocedure of market is working (Kolstad, 2011). In addition to this it is making an attempttowards explaining how individual makes allocation of scarce resources and possess severalalternatives and other matters that can increase dealings with wants of human and theirsatisfaction. The present investigation includes usage of supply and demand analysis indetermination of price of lead. Further it covers negative externalities that rise because ofexcessive consumption of saturated food fat by certain people. (i) Use of supply and demand analysis in determination of price of leadDemand and supply is regarded as the most fundamental concepts of the economics. It isconsidered as the backbone of market economy. Demand is referred as the quantity of theproducts and services which the buyers desires (Lee and Lemieuxa, 2010). The quantitydemanded is regarded as the amount of product that people are willing to purchase at some price.The association among the price and quantity demanded is referred as demand relationship. Thedemand curve is sloping downward. It is being stated in the law of demand that higher is theprice, the less quantity of the product is demanded. In contrast to this supply reflects the quantity which market can offer. The quantity that isbeing supplied is regarded as the amount of some good producers desires to make supply whilereceiving some price. The curve of supply is upward sloping. It is being stated by the law ofsupply that higher is the price the greater quantity of the product is supplied (Nagurney, 2013).The correlation that exists among the price and the amount of the goods and services whichneeds to be supplied within the market is referred to as supply relationship. Price is considered asthe reflection of supply as well as demand. The association among demand and supply presentsthe forces beside the allocation of resources. Within the market economy theories, demand andsupply theory would make allocation of the resources in the most effective manner. The law of demand: This states that if all the factors are equal, with the increase in priceof good, less number of people would demand for the particular good. In other sense it implies3
that higher prices means lower quantity is demanded. The amount of the commodity that is beingpurchased is less at higher prices due to the reason that prices goes up and also the opportunitycost of buying the particular commodity. Because of this people would avoid purchasing whichwould force them in forgoing the consumption of something that is being valued more. The law of supply: It reflects the quantity that is being sold at some price. Howeverunlike the demand law, the supply relationship reflects an upward slope. Such implies that higherthe price the higher would be quantity supplied (Newbold, Carlson and Thorne, 2012). Producerswould make supply of more at higher prices as selling greater quantity at high price can lead toincreasing the revenue for the firm. Supply and demand are regarded as the economic model related with the pricedetermination within the market. It offers that within competitive business environment, the unitprice of specific commodity would differ till it settles at a point wherein the quantity demandedis equal to the supplied quantity by the producer. This leads to economic equilibrium of the priceas well as quantity (Norsker and et. al., 2011). It has been assessed that the law of demand andsupply includes four basics. This presents that in case demand increases and there is no change inthe supply then this results in increasing the equilibrium price and greater quantity. Further whendemand decreases and there is no change in supply then such results in lowering equilibriumprice and low quantity. Another basic presents that in case there is no change in the demand andsupply increases then such results in lowering the price of equilibrium as well as greater quantity.Moreover in situation there is no change within the demand and supply decreases then suchresults in increasing equilibrium price and lowers the quantity. The pricing that is demand oriented focus on the nature of the demand curve for theproduct or the service that is being priced. The nature of the demand curve to large extent isaffected by the structure if the industry wherein the company is operating. Because of this firm isoperating within the industry that is highly competitive. Further price can be considered asstrategic advantage in attaining as well as maintaining the market share. In contrast to this in casebusiness is operating in the environment where there is presence of few dominant players, therange wherein the price varying price is minimum (Pigou, 2013). Changes in the supply anddemand can be long or short run in nature. Weather tends at affecting the prices within themarket in short run course of time. Along with this alteration in the preferences of the consumers4
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