Report on Business Economics - Scaricty and Demand

BUSINESS ECONOMICS

TABLE OF CONTENTS
INTRODUCTION........................................................................................................... 4
TASK 1......................................................................................................................... 4
1.1 Economic problem of scarcity and demand as well as problem of resource allocation in UK
economy.................................................................................................................... 4
1.2 Role of supply and demand in economy and way in which equilibrium is achieved in market. .4
1.3 Importance of different market systems and role of opportunity concept in decision making....5
1.4 Elasticity of demand and importance of elasticity of demand in market interactions..............6
TASK 2......................................................................................................................... 6
2.1 Implications of pricing and corporate objectives in firm operations........................................6
2.2 Way in which price is determined in different market structures and impact of market structure and
operational decisions of company on its behavior..................................................................7
2.3 Impact of market regulations on market power of Baratt development....................................8
TASK 3......................................................................................................................... 9
3.1 Change in economic structure of UK in 21st century and its impact on business environment........9
3.2 Macroeconomic policy tools and their success in achieving macroeconomic objectives and their
impact on Baratt development.......................................................................................... 9
3.3 Evaluation of economic performance of UK economy.....................................................10
TASK 4....................................................................................................................... 10
4.1 Theory of comparative advantage and merit and demerit of free trade for UK economy............10
4.3 Impact of BRICS on developed economies and impact of global economic shocks on UK economy
.............................................................................................................................. 11
CONCLUSION............................................................................................................. 11
REFERENCES............................................................................................................. 13
Figure 1Stamp duty rates................................................................................................... 8

INTRODUCTION
Business economics is the one of the important domain that have impact on the business
firms. In the current report, scaricty and demand that is in UK construction industry is discussed
in detail. Along with this, different market systems are explained briefly in respect to price
determination. In middle part of the report, change in economic structure of the nation and use of
monetary and fiscal policy to handle situation is analyzed. At end of the report, globalization and
impact of BRICS on developed economies is explained. In this way, entire research work is
carried out.
TASK 1
1.1 Economic problem of scarcity and demand as well as problem of resource allocation in UK
economy
Economic problem of scarcity and demand is observed in economy number of times. In current
time period there is huge uncertainty in global economy and this is also affecting UK economy.
Real estate property market is heavily affected by this global uncertainty and BREXIT. It can be
observed that Baratt development like firms are facing huge problems in their business. Due to
uncertain economic condition people are in confusion and due to this reason they are following
wait and watch approach (Dunfee and Nagayasu, 2013). Due to all these reasons there is less
demand of the real estate property in the market. There is supply in market but there is no
demand. This, demand and supply mismatch is creating big problem for economy. In economy
usually problem of resource allocation is observed. Resource allocation basically reflects the
process under which specific resource is allocated across different entities in proper manner. It is
very important to ensure that there is appropriate match between demand and supply in the
economy so that equilibrium can be bring in the economy. Time to time government take number
of steps to bring equilibrium in the nation economy (Kwon, 2010). It depend on stability of
global situation which make nation condition good specially when there is turmoil in global
condition.

1.2 Role of supply and demand in economy and way in which equilibrium is achieved in market
There is great role of demand and supply in the market. Entire economy goes in growth and
recovery stage due to demand and supply factors. Change in demand and supply factors also
heavily affect entire economy. There must always be balance or equilibrium in demand and
supply. If same will not exist then it will negatively affect entire economy. For example there is
huge supply of real estate property in the market and demand is less than in that case price of real
estate is declining in the UK and due to this reason further less number of people is showing
interest in purchase of homes (Galaskiewicz, 2016). There are number of ways in which
equilibrium can be obtained between demand and supply in the market. For example in order to
boost demand in real estate market government can make available already prepared homes at
low price to people under any construction scheme. This will entice people to make investment
in real estate property and this will boost demand and price of real estate property in the market.
Government may also adopt other alternative options to boost demand of real estate property in
the market. It can take steps to attract foreign investment in real estate property in the nation.
This will boost demand of real estate property in the market and in this way equilibrium will be
achieved and demand will be equal to supply in the market.
1.3 Importance of different market systems and role of opportunity concept in decision making
Market system basically reflect scenario where there are specific number of buyer and sellers
in the market and sort of product they are offering to the customers. There are different sort of
market systems like perfect competition, monopoly, oligopoly and monopolistic competition. All
these market systems are totally different from each other.
 There is importance of perfect competition market because under this different alternatives
are available to people and they according to their preference can make purchase of any item
at any purchase.
 On other hand, there is monopoly market and it has its own importance. In case of monopoly
market there is single firm that offer product to the people. Such kind of firms maintains
quality in their product and by doing so retain customers in the business.
 In case of oligopoly already there are few players in the market that have control on market
(Jarvis, 2011). There is huge competition between these firms in the market and due to this