Contemporary Business Economics

BM533: CONTEMPORARY
BUSINESS ECONOMICS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK 1............................................................................................................................................3
Law of demand, its movement and shift......................................................................................3
Law of supply, its movement and shift in supply curve..............................................................6
TASK 2............................................................................................................................................9
Comparison and evaluation of economic theories.......................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
The Business Economics can be defined as daily economic activities that help to understand
the business economic activities. This activity includes the Law of demand and law of supply by
the consumer and supplier in the market and understand the behaviour occurs on the various
factors like change in price and other factors as well (Acs and et.al., 2018). The report has made
on the topics of law of demand and law of supply and the changes occurs with the change in
price and other factor. Movement of demand of goods and suppliers are change due to change in
price without any changes in other factor whereas shift in demand and supplies are done when
there is change in other factor and price constant. Other we also discussed the theory on the 21st
century comparing with the 20th century and compare with the modern business practise.
MAIN BODY
TASK 1
Law of demand, its movement and shift
Law of Demand: The law says that the change in demand of the consumer occurs when
there is a change in quantity where other factor remains constant. It means that there is a change
in quantity demand from the customer if prices changes in the market. The behaviour of the
customer changes id there if there is change in price I.e. when the prices rise in the market of any
product then the demand of that product fallen in the market as consumer will wait for price
drop. Same as when the price of the product drop in the market consumer will demand more and
more of that product for consumption (Makowski and et.al., 2017). Whereas in law of Demand
Ceteris Paribus theory apply here which says that all other factor remains the same other than
price, quantity changes when there is a change in price. It Shows the relation between two
variables I.e quantity on horizontal axis and price on the vertical axis which shows changes in
the price show the impact on quantity demanded by the consumers in the market. However, in
real world not only price but other factor also affect the demanded quantity of the product in the
market depends on income of the consumers. The two tool of law of demand are:
 Demand schedule : Shows the different level of quantity demand by the consumer at the
different price level.
 Demand curve: Shows the graphical representation of the demand schedule where
horizontal shows the price of the commodity demanded by the consumer and vertical axis
shows the quantity demanded by the consumer.

Movement along demand curve: Movement in demand curve shows when there is a
change in price cause change in quantity happen either upward (means recession) and downward
(means expansion) other factor remains constant (Mazurek, García and Rico, 2019).
Upward: It refers to increase in price which reduces the quantity demanded by the consumer.
Downward: It refers to the decrease in price of the commodity results in the increase in the
quantity demanded by the consumer.
Illustration 1: Law of demand