Analysis of Demand and Supply in Business Economics: Polo Mints

This report provides a detailed analysis of the business economics surrounding Polo Mints. It begins with an introduction to business economics, emphasizing the roles of supply and demand in market operations. The report then delves into the relationship between demand, supply, and price, explaining the laws of demand and supply with graphical representations. It discusses factors influencing changes in demand and supply, including income, substitution, taste, market size, and technology. The report explores market equilibrium, excess supply and demand, and investigates how demand and supply impact market operations, including the influence of various factors on the price of Polo Mints. Finally, it highlights the importance of demand and supply analysis for business decision-making, covering elements like income effects, substitution, tastes, market size, and future price expectations, as well as the impact of commodity prices, technology, government policies, and transport conditions. The report concludes with a comprehensive overview of the factors affecting the supply and demand dynamics within the Polo Mints market.

Business
economics

Table of Contents
INTRODUCTION...........................................................................................................................1
Task .................................................................................................................................................1
Supply and demand analysis allows us to investigate and understand the operation of markets.
.....................................................................................................................................................1
Relationship between demand, supply and price:- .....................................................................1
Equilibrium of supply and demand :- .........................................................................................3
Changes in demand :- .................................................................................................................4
Change in supply :- ....................................................................................................................4
Investigate through demand and supply in market operation :- .................................................5
Impact of demand and supply upon price :- ...............................................................................7
Importance of demand and supply for business decision:-.........................................................8
Conclusion ......................................................................................................................................8
REFERENCES..............................................................................................................................10
Shifts in the Supply Curve. 2017. [ONLINE] Available through
:<https://www.toppr.com/guides/economics/the-theory-of.../supply-curve-of-a-firm/>...............11

INTRODUCTION
Business economy plays vital role in organization and it studies in every field of
organization like finance, marketing and environmental issues that face by every organization. It
also analyses that available resources liker labour and capital for evaluate that optimum
utilization of scarce resources. Because human need is unlimited and resources is limited so it
focuses on demand and supply and maintain it as well as it also analyse that factors affecting to
organization. Polo mints is a brand that it introduced in 1948 and it is brand of United Kingdom.
Polo mints is a breath mint that structure is mint with one hole in middle. This report will be
cover that supply and demand analysis, through this investigate markets operation, factors that
effect of price of polo mint.
Task
Supply and demand analysis allows us to investigate and understand the operation of markets.
Supply and demand is important and it plays important role in markets. Demand refers to
that quantity of polo mint is want to through buyers and it is also on depend on price of product
because if product price is affordable and reasonable so its demand increase so it is called
demand relationship.
Supply refers that quantity offer by polo mint in market. So it means that if producer of
product is satisfied from amount of good that they receive so it offers and supply products. It also
majorly depend on price if customer willing with price of product so supply of product is
maintained.
Relationship between demand, supply and price:-
Law of demand :- law of demand is based on price because if polo mint's increase their
price of product so customers decrease their demand. It means that if price is increase of product
so demand is decrease. Through this if price is increase highly so customer ignore purchase of
product on high price and it start consumption of alternative product. If price of product is
decrease so it effects on demand of product and customers demand increase.
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From this diagram A,B and C point show direct relation between price and demand. Q1,
Q2 and Q3 shows quantity of product that depend on price P1,P2 and P3. In this diagram it
shows relation that if price is high so demand is low and it is show on A point and through C
point that it show that when price is low of product so demand is increase and customer consume
and demand of large quantity.
Decrease in demand :- demand decrease due to income of customers decrease and
demand and supply stable so it also reduces demand of product. So if price and supply of product
change so it demands of product also change. And demand curve shift in leftward. In above
diagram DD shifts to D1.
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Illustration 1: demand relationship
[Source :Law of Demand, 2017]
Illustration 2: decrease in demand

Increase in demand :- demand curve shift right ward when demand increase so it raises price of
products. In above digram E shift rightward to E1.
Law of supply :- it means that supply of polo mint is increase when customer satisfy to
give price of product because if given price of product get by supplier so it offers more quantity
of product. But law of demand shows that if price of product is increase so supplier also increase
their product because it earns more revenue. Through this supply relationship show upward
slope.
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Illustration 3: increase in demand

Increase in supply :- when supply increase so it supply curves shift to rightward. And it this
situation that create competition among all sellers and cost also increase in this situation.
Decrease in supply :- supply decrease on this situation that demand increase and cost of product
also decrease. So it is use for control supply through decrease supply of product. In above
diagram supply curve shift leftward.
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Illustration 4: increase in supply
Illustration 5: decrease in supply

In above diagram supply of product is show by A, B and C points. Through this diagram
it shows that relation between price and supply of quantity of product. It shows that when is
increase so supply of product is also increased by supplier (Li, Chen and Dahleh, 2015).
Equilibrium of supply and demand :-
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Illustration 6: supply relationship
[Source : Law Of Supply, 2018]
Illustration 7: equilibrium of demand and supply
[Source : Supply and Demand Equilibrium, 2018]

It is a situation that supply and demand is balanced with each other. It is a situation that when
supply of polo mints is very high and production is also high so it is created situation of over
supply and price is become stable so demand also increase and it creates more demand of
product because consumer always want maximum satisfaction on low cost so its maintain and
mange balance between demand and supply that called equilibrium. Because demand is based on
purchasing power and if customer has not pay power so it is not effective demand. Through this,
price also stable because supply increase and polo mint has need of sale product on possible
price so demand also maintain similar of supply.
So equilibrium shows that situation when price and quantity that demand and supply
equal with each other. So it helps in this situation society get extra benefit. So it also helps in
welfare of society. Because in buyers and sellers decision is independent in this situation.
In above diagram shows that price and quantity is stable so demand curve and supply
curve also equal and maintain. It is created through following factors that:-
Excess supply :- it means that if supply of product in market is over that it create excess
supply and prices of polo mints maintain and stable. So it is helps in earn more revenue because
customer get satisfaction so it becomes need of them.
Excess demand :- it means that if demand of product is increase equal to their supply so
it also creates equilibrium. So it is beneficial for consumer and it can purchase more product on
same price (Beyers, 2016).
Changes in demand :-
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Change in demand means if curve of demand shift right or left. It includes total demand
of market that changes. Demand shift through different factors like consumer preferences, new
competitors enter in markets. It also directs affects to price of polo mints because demand curve
shift in right side that means positive effect that helps in increase demand and organization
increase their product price for earn more revenue. If demand curve shift in left side so it means
that demand of product is decrease. Parallel change in demand means that no changes in demand
and it is a good that its price is inelastic (Martin, 2017).
Change in supply :-
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Illustration 8: change in demand
[Source : Shift in Demand Curve, 2018]

Changes in supply means that supplier of polo mints is increase their supply of product so
curve is shift. Its creates imbalance in market but organization has to change this imbalance
through change in price and demand of product. If supply increase so supply curve shift in right
side and if decrease so curve shift in left side. Changes in supply comes through that technology
advancement because it makes easy to work and consume low cost and less time so supply more
product and earn revenue.
Investigate through demand and supply in market operation :-
Demand and supply of polo mint is analysed through many factors so organization so
many types of investigation for fix and plan about demand and supply. Because demand and
supply is depended on customer choice that they what to want and how it produces. Price is
effect to both producer and consumer. Because if price of product increase highly so producers
produce more product and consumer decrease their demand of product. If price is decrease of
polo mint so producer decrease their product and users of product increase their demand. So
through this business economics focus that efficient and effective uses of available scarce
resources and provide maximum satisfaction to people through provide low cost product (Tang,
Rahimi and Karimi, 2016).
Demand of product is depended on following factors :-
Income effects :- demand of product refers that quantity of goods purchase by consumer
on each price at specific time period. Demand of polo mint made effective when income of
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Illustration 9: change in supply
[Source :Shifts in the Supply Curve, 2017]

consumer increase. It effects through two way because income effect of demand of product that
if price of product increase so it consumer also decrease their demand and uses. But many
product's demand is not affected through income and price like salt because it is a essential need
so consumer purchase these type of product and demand is not affected.
Substitution :- Substitute of product means this product that it satisfy needs of consumer
similar other product. Like polo mint and centre fresh, tea and coffee. It means that when polo
mint price increase so consumer use their substitute product because both satisfy same need like
breath fresh. So customer demand goes up of product that price is low.
Taste and preference – demand of polo mint is also depended on taste and preference of
customer because choice and taste of consumer frequently changing so according to taste and
trend consumer demand increase of the latest product and demand decrease of product when
taste and preference is change for particular product and new product come in market.
Market size :- demand of polo mints also effect size of market because day by day
population increase so young age group demand increase. It means that number of consumer
increase so it quantity of product demand automatically increase.
Expectation of change price in the future:- demand curve is increase when people
expect that price will change in near future so they purchase excess product quantity and keep it.
So it also increases demand of polo mints. It also effects demand of present and future demand
because if demand increase in present so it affects future demand and demand decrease in future
(Brandano, Osti and Pulina, 2018).
Supply of product depend on following factors :-
Price of commodity :- through this supply of polo mint is affect. Because price and
supply of product direct relate. If price increase of polo so supply of product also increase by
supplier because its helps in earn more revenue. Same as price of product decrease so it also
affects to supply and supply of product also decrease.
State of technology :- through technology polo mint produce more product so its affect
to supply because it reduces cost of product so its helps in increase profit. It also saves cost and
time of production and supply more goods but if technology is out dated so it affects supply and
decrease it.
Government policies :- it majorly affects to supply because if tax rate increase by govt.
So it affects to production and cost of product increase and organization reduce supply and it tax
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rate decrease so supply of product is high because it's a opportunity for organization of earn more
revenue.
Number of firms :- supply of polo mints affected through number of firm in market with
same product and size because if large number of firms increase in markets so customer has
choice of alternatives and these things divide all customers in different part so it also affects
supply because demand is decrease through this (Cameron and Stanley, 2017).
Transport condition :- supply of polo mints highly depend on transport condition of
country that means if transport condition is good and fast so it easily supply polo mints and also
supply in very huge amount so it helps in provide goods in large level and customers also knows
about product and productivity, sales and profitability increase.
Cost of production :- it is also very important factor that affect supply of polo mint
because if organization spend more money on production so it also increases rate of their
product. If rate is increase so demand of product is decrease and supply of product is increase on
high rate for increase profit (Mehrjerdi and Alipour, 2016).
Impact of demand and supply upon price :-
Price is a major factor in every deal because all operations and deal in markets are done
for price. It is depended upon demand and supply. If demand of product is high so price of low
and if supply of product is high so price also increase because it affects on profit rather than
increase revenue. Following demand and supply reasons that effect price of product :-
Customer preference :- price of product is depended on that according to market
condition and evaluation that demand and supply of product. Organization evaluates that supply
of product increasing so it also increases their price so price affected through supply of product.
If price of product is low so demand is increase of polo mints. So through this it has to increase
their price for reduce demand so price is also affected in this situation.
Seasonal reason :- price is affected through demand and supply of products and if curve
of demand and supply shift so it directs affect to price of product. So seasonal factor is also a
major factor that affect price of product because many product available in market that demand
and supply is base on season and production is according to season so it directs affect to price
because product demand increase in season so large number of customer's demand of product
and organization has to supply more quantity of products so it increases their product price for
earn more revenue because it has opportunity of increase their revenue.
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