Table of Contents INTRODUCTION...........................................................................................................................1 MAIN BODY..................................................................................................................................1 CONCLUSION................................................................................................................................4 REFERENCES................................................................................................................................5
INTRODUCTION Business environment is said to be one of the basic aspects that is effectively related with the internal and external factors.It would provide information about the all kind of facts that how the company operations such as employees, customer and other regulation are affecting the nation. Demand and supply is most fundamental concept of economics and it is the main part market economy. Demand refers to the quantity of commodity requires by the whole economy and supply refers to the quantity supplied by the industries to market in order to fulfil the demand of commodity. This study explores the relationship between relative energy prices increases in winters and energy consumption, during the inflation which leads to energy poverty in some sections of the society (Ballard and et.al., 2012). MAIN BODY When the economic growth and the energy price level were stable, inflation persisted; thus rising energy prices benefited both the economy and the environment. The effective analysis is important for the policy makers to establish effective energy pricing policies that ensure both energy conservation and the stability of the pricing system. In case when the energy prices increase above then the current rate of inflation then it leads to poverty of energy in middle and lower class areas, as demand increases due to monopoly of government in supplying the energy the prices of energy increases, in order to minimise the effect of the problem or to avoid the problem. the government can improve the situation by the following measures. Current energy conservatism and emissions reduction efforts should continue in working: Global warming increases by the human made carbon emissions threatens the world's communities and ecosystem. Price reforms of resource intensive products should be promoted. Third, the establishment of a price formation mechanism that fully reflects market supply anddemand,resourcescarcity and thecostsof environmentaldamage shouldbe accelerated (Werbach and Hunter, 2012). Controlling the industrial growth rate and reducing the energy intensity, make efficient and effective use of energy. 1
Promotethegrowthanddevelopmentwithsustainableenergyandfocusonthe conservation of traditional energy. These all measures help the government in solving the problem of unfairly increase in prices of energy due to inflation, by these measures sustainability with energy promoted, so it will helpful in maintaining the stability in prices of commodity. Although, theory of demand and supply is a central matter of economic system and it's functioning. As in above case of energy prices rises in winters unfairly due to inflation, the demand and supply applies to its provisions. According to the concept of demand in economic law the relationship between price and demand, the quantity of a commodity is inversely related to its price, means the price of a commodity increases demand for that commodity decreases, and demand of its substitutes increases and other things remains constant. But as in case of energy, if the prices of energy increases but its demand remains constant because it’s a necessity goods changing in prices of energy doesn't affects its demand and law of demand doesn't apply here. Moreover, it is the type of Giffen commodity, the law of demand does not apply in case of giffen goods as due to increase or decrease in prices of these commodities does not affects the demand of that commodities as due to its necessity in life (Vitale, 2011). The graphical representation of demand curve remains unchanged in case of energy as it is necessary to consume even prices keeps changing. This is the situation of perfect in-elasticity of demand curve as when the proportionate change in price the demand of commodity remains unchanged as may be due to nature of good 2
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or commodity. Perfect in-elasticity of demand curve is extreme case for it implies that the consumers are willing to pay any price for the commodity because of its necessity in life. But, it affects the supply falls as, equilibrium market price can rise without any contraction in the demanded quantity of necessary goods like energy. Supply: It is known as one of the fundamental economic concepts that are related with the total amount of a specific foods and services that is present to a customer. It is basically associated with the particular price of the amount available across a wide range of prices if shown on a graph. In economic, supply is basic amount for a particular aspect that a firm used to produces, labourers and deliver financial assets or other agents will provide to the marketplace. Law of supply: According to this particular law of supply is known as basic principle of economic theory that provide that other factors remain constant and increase in overall price results in increase in the quantity supplied. In other words, there is a positive relationship among price and quantity. It has been seen that quantity move in the similar direction as prices goes on to varies. (Source:Law of supply.2017) The law of supply is so effective that an individual cannot even be aware of every aspect related with the supply of products and services. It has been seen that law of supply basically increases the effect of prices changes on the producer’s behaviour. This is microeconomic law that can states that, all other factors being same, as the cost of goods and services goes on to increase, the quantity of products that supplier deliver offer could also be increase or vice-versa (Janita and Miranda, 2013). 3
CONCLUSION From the above project report, it has been concluded that business is one of the vital aspects that can be need to be analysed before making any specific decision. Although, there are various microeconomic factors those are affecting the economy of nations are mentioned effectively. Role of supply and demand are crucial to analyse so that changes of growth and sustainability can be increase in near future time. 4
REFERENCES Books and journals: Ballard, C.&et.al.,(2012).Dimensional Modeling: In a Business Intelligence Environment. IBM Redbooks. Janita, M.S.&Miranda, F.J.,(2013). The antecedents of client loyalty in business-to-business (B2B) electronic marketplaces.Industrial Marketing Management.42(5). Pp,814-823. Vitale, R.P.,(2011).Business to business marketing. Pearson Education India. Werbach, K.&Hunter, D.,(2012).For the win: How game thinking can revolutionize your business. Wharton Digital Press. Online Lawofsupply.2017.[Online].Availablethrough:< https://economictimes.indiatimes.com/definition/law-of-supply>. 5