Economic Problem of Scarcity and Demand in UK
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Added on 2020-06-04
Economic Problem of Scarcity and Demand in UK
Added on 2020-06-04
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Business Economics
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.1 Explaining the economic problem of scarcity and demand resource allocation in managingUK's economy and Co-op food...................................................................................................11.2 Discussing the role of demand and supply in UK's economy and explaining howequilibrium is achieved...............................................................................................................21.3 Evaluating the importance of different market system and the role of opportunity cost inhow Co-op food will make the economic decisions...................................................................31.4 Explaining elasticity of demand and assessing the importance of elasticity in marketinteraction of Co-op Foods..........................................................................................................4TASK 2............................................................................................................................................52.1 Explaining the implications of pricing and corporate objectives on the operations of Co-opFoods...........................................................................................................................................52.2 Comparing how price can be set in Different market structures and market structures andoperational decision affect the Co-op Food................................................................................62.3 Evaluating how the regulations of UK affect market power of Co-op Food........................6TASK 3............................................................................................................................................73.1 Analysing how UK economy has changed in 21st century and how this has effected Co-opFood.............................................................................................................................................73.2 Evaluating the tools available to meet the macroeconomic policy in UK and success ofUK's government in achieving the objective and how does this effect Co-op Food..................73.3 Evaluating the performance of UK economy in global market and how they affect Co-opFood.............................................................................................................................................8TASK 4............................................................................................................................................84.1 Explaining the theory of comparative advantage and merits and demerits of the free tradeand how globalisation effect Co-op Food...................................................................................84.2 Analysing the impact of emerging economy on developed countries..................................9CONCLUSIONS..............................................................................................................................9REFERENCES..............................................................................................................................10
INTRODUCTIONUnited Kingdom is the financial hub of world and the second largest economy in theEuropean Union and is comprising 3.9% of the world's GDP. UK is wholly dominated by servicesector which is contributing about 80% of the total GDP of the country and is one of the mostglobalised economies. In the year 2016 UK decided to leave the European Union which iscommonly termed as Brexit and because of this the value of Pound Sterling fell to its 31 year thelowest rate. This effected to the whole of the economy of UK and the Bank of England cut itsinterest rates to about 0.25%. Majorly affect Co-op food as the demand and supply are the mainforces which are applied to the company and this was also affected the most. The present reportis based on Co-op food and how did the company effect Brexit and how UK's regulations affectthe market power of the company.TASK 11.1 Explaining the economic problem of scarcity and demand resource allocation in managingUK's economy and Co-op food.Scarcity in the economics term is known as the limitation of the resource when there aremany people who are demanding the product but the resources are very limited to fulfil the needto the people (Acs and Carlsson, 2012). This is a very basic problem in any economy of theworld as there are many people who are living in UK and many are there who from all over theworld are migrating to UK. So there is always a gap between the number of people and theamount of available resource which is known as scarcity of resource.Demand is the willingness and the ability of the individual to pay for a product or service.There is an economic problem of scarcity and demand allocation of resources which alwayscreate a problem for the economy of UK and also in Co-op food. All the resources in aneconomy are limited and then it becomes difficult to allocate them as there are population issuesthen. And then that population is also having numerous and unlimited demand and need ofhuman to satisfy them.Resource allocation is the problem of the economy of what to produce, how to produceand for whom to produce (Anderson, Sweeney and et,al., 2014). These are the basic economicproblem faced by economy of UK and where they need to decide between the production ofconsumer and capital goods with problem of scarcity and problem of choice.
1.2 Discussing the role of demand and supply in UK's economy and explaining how equilibriumis achieved.DEMAND This is the ability and the willingness of an individual to pay for a certain goods andservices in the economy over a certain period of time. There are always unlimited demand of theconsumer in the economy as there are number of desires of the people which is at the same timeend less. Without having the demand of the commodities the business would not be producingthe products and selling them in the marketplace as that is meaningless.Role of DemandIf there are no demand of a commodity in the market then certainly they will not beproducing or selling those products (Audretsch, Hülsbeck and Lehmann, 2012). The role ofdemand in UK's economy is very important and is very wide in the market sense. As withoutdemand it is not easier to explain the supply and the not easy to decide the price of the productand services. Demand of a commodity helps to calculate the price of that product and the price ofthe related product.SUPPLYSupply is the available amount of product per unit of time that the producer ormanufacture is ready to sell at a various given prices when the other factors are constant. Inmarket the supply is the amount of product per unit of time that the producer are willing andhaving the ability to sell at a various given price.Role of SupplyIf any product is having a huge demand of it in the marketplace but there are no one tosupply those or to get them available to the public then that demand would be of no use. Sosupply is having a very important role to be played in the UK's economy to increase the profitsfor the firm and then the development of the economy as the whole.EQUILIBRIUMBoth the demand and the supply have a very important role to be played in the growthand development of the economy as a whole. As without demand the company will not be able to
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