Business Economics Assignment (PDF)

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ECONOMICS FORBUSINESS
Table of ContentsINTRODUCTION..........................................................................................................................3MAIN BODY..................................................................................................................................3Demand supply and pricing-.........................................................................................................3CONCLUSION-..........................................................................................................................13REFERENCES.............................................................................................................................14
INTRODUCTIONBusiness economicsis a field in appliedeconomicswhich useseconomictheory andquantitative methods to analyzebusinessenterprises and the factors contributing to the diversityof organizational structures and the relationships of firms with labour, capital and productmarkets.Business economics is also known as managerial economics. Present study will bebased on Polo mint. (Basu, and Bundick, 2017). Also describe the impact of different markets inthe company. Polo Mints is a brand of breath mint whose defining feature is the hole in themiddle. The peppermint flavoured Polo was first manufactured in the United Kingdom in 1948,Report will describe the different factors that affect the price, supply and demand of the product.It will also explain the reason for shift in demand and supply curve. The main aim of the report isto identify the main factor responsible for deciding price in Polo mint.MAIN BODYLaw of demand and supplyThe law of demand states that, when all other factor is remained constant or equal.Thelaw of demand states that conditional on all else being equal, as the price of a good increases,quantity demanded decreases; conversely, as the price of a good decreases, quantitydemanded(Chkanikova, and Mont, 2015). Price has been described as the value of the goodswhich is used by the seller to sale their product by charging the minimal price for product. Thedemand curve which is been made is generally conclave. For long term prices consumers willprefer the low price for high quality products. So Polo Mint must lay emphasis on it.Shift in demand curveThe demand curve is describedasthe relationship between quantity demand of good orservice and its price. In the demand curve the price of productisremains constant. The demandcurve shiftsaccording to the change in price and customer preferences that are potential incomeof the customer, taste, expectations of change prices in the future.Increases indemandare shownby ashiftto the right in thedemand curve. This could be caused by a number of factors,including a rise in income, a rise in the price of a substitute or a fall in the price of a complement.If the demand curve shifts right then Polo Mint will be benefited by it as consumer will buymore product.Increase in Demand -3
For example, the income of customer is increased so the demand of the product will alsoincrease. Also, the price of product remain constant. Due to the income of customer is increaseso the purchasing power of customer also increased. So customers easily buy the goodswhentheir income increases and price of the goods do not change. (Chkanikova, and Mont, 2015).The demand curve will be shift on rightwards. There are some reasons because of which thedemand curve shiftsInclude the rise in incomeRise in the price of substitutePrice of the compliment goodsIn the figure 1 there are rightwards shift in the demand curve from D to D1 that describeincrease in quantity demand from Q TO Q1. Also, the price is remained constant as p.Shift in Demand CurveIncomeIncome effect has the strong effect in changing the purchasing power of an individual. As theincome increases demand also increase but when income falls demand of the product also falls.Customer trends and tasteswhen the demand of the public desires ,emotions or preferences change in favour of someproduct the demand will effect directly.Expectation of future pricesWhen people think price of something will going to be rise in future their demand willrise. For example if people know that price of polo mint share will going to be rise in the futurethan the demand of the shares will rise.Price of related goodsPrices of substitute products always effect the demand of related goods. As their may be .an increase in the price for the goods similar to polo mint may affect the demand of polo mint,demand of polo mint will rise.4
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