Understanding Demand and Supply in ASOS Plc

Contemporary
Business Economics

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Overview of ASOS Plc company................................................................................................3
Understanding Demand...............................................................................................................3
Understanding Supply.................................................................................................................7
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12
Books and Journals...................................................................................................................12

INTRODUCTION
Microeconomics is the study of economic concepts which are related to an individual
business unit. The concepts are helpful in answering many complex and important questions of
that unit such as demand, supply, equilibrium, prices etc. The study of these aspects work as
guidelines and offer useful insights necessary for understanding (Browning and Zupan, 2020).
In this report two useful concepts related to Demand and Supply, along with different
aspects of these concepts are comprehended. The report goes on discussing these concepts in
relation with an online retail business of United Kingdom, ASOS plc.
MAIN BODY
Overview of ASOS Plc company
ASOS is a high level British retail and fashion brand. The company is the one that
undertakes business online and offer its consumers Fashion wear and cosmetics products. Now,
since the business is the one that holds business operations through online medium, it is
understandable that ASOS is not a very old company in market. It was founded in year 2000 and
since then it is continuously operational with all time positive and rising graph. The new age
technologies of internet and digital media, together with large scale engagement of consumers
over these mediums, has helped company to secure good and reasonable growth in all these
years. The scale and size of business operations of ASOS plc are remarkable. The company is
selling over 850 brands over its website and the shipping engagements of company are no less
than 196 countries across the world. The initial tagline of company was “Buy what you see on
Films and TV”, also its business operations were limited to such products only. It was the
thinking of management then and there in company that people will be attracted towards such
products. But buy the course of time, changing business environment and competition has
induced company to widen its operations.
Understanding Demand
Demand for a product and commodity is referred to the quantity of products which are
demanded by consumers at a given point of time and at given prices of product. It is the
willingness of buyers to purchase products of ASOS plc. It has to be noted that, the demand for
products of ASOS is combined of two factors, one is the willingness of buyers to go over the
website of company and place their specific orders for the brand of their choice, and second is

the their willingness to pay for it because without willingness to pay demand will be rendered
merely a wish (De Quidt, Haushofer and Roth, 2018).
In the concepts of Microeconomics, Demand is governed by a law, called Law of
Demand. Law of Demand specifies that there is seen inverse relation between prices of product
and the demand in the market. Which means, with increase in prices of products of ASOS plc
demand for them will decrease, and with decrease in prices demand will increase. The law is
basically describing behaviour of consumers in market and is applicable in normal
circumstances. In graphical presentation, the curve which shows this relation is called Demand
curve.
In Microeconomics there are three aspects of Demand, which are comprehended with
changes seen over the Demand curve. The report has made understanding of all these three
aspects.
Movement along Demand curve
Movement along the demand curve is that concept of Microeconomics which directly
represents the law of Demand. In this concept, it is seen that with increase in prices, demand for
products are decreasing and with decrease in prices demand for Products of ASOS are
increasing. The concept is called Movement along Demand curve, because the changes in
demand with increase and decrease in prices are reflected over demand curve of ASOS plc in
such manner where the demand point fluctuate over the curve itself (Creutzig and et.al., 2018).
However, this is applicable only when other factors for ASOS plc are not in force and simply
market forces are driving demand. This can be understood from following Diagram.