Contemporary Business Economic: Explaining Law of Demand and Supply with Factors and Theories in 21st and 20th Century

BM533
Contemporary
Business Economic

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Explain the law of Demand, movement along the same demand curve and changes in
demand curve with its factors (with the aid of diagram)............................................................3
1.2 Explain Law of supply, shift along with the constant & different factors which is having
change supply curve with the help of suitable curve..................................................................6
TASK 2............................................................................................................................................9
Compare and contrast emerging theories and models in 21st century contemporary economics
with those of the 20th century, and relate both of these to modern business practices...............9
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Economics comes from two Greek words that are 'eco' which means homes and 'nomo'
which means accounts, the subject has modified from being how to keep the family accounts into
the wide-ranging subject of today. Economics has grown in scope, very slowly up to the 19th
century, but an accelerating rate ever since(Baker, and et. al., 2021). Today it has so many parts
in language, it has lingual roots, well-formed rules, good and bad structure, accent and a broad
knowledge. In this report the company chosen is TESCO, it is a British multinational grocery
shop which is headquartered in Welwyn garden city, England. It is the world thirds most popular
retailer, the ninth biggest company in terms of revenue . It has five shops across the whole
country. It was discovered by jack colen in hackney, London in 1924
TASK 1
1.1 Explain the law of Demand, movement along the same demand curve and changes in
demand curve with its factors (with the aid of diagram).
Demand is an economic principle which refers to consumer's willingness to pay a price for a
particular goods (Rainò, Novotny, and Frimmer, 2021). Holding all factors same, an increase in
price of a product will fall the quantity demanded. Law of demand is inverse relationship
between price and demand, it says that when price for a commodity will rise the demand will fall
due to high prices, consumer will not buy that specific good. On the other hand, if prices for a
commodity will fall the demand for that particular good will rise(Reeves, 2021). In this report of
Tesco, if prices of goods will increase then demand for them will fall and with low prices in
Tesco, there will be high demand with low price and low demand with high price.

From the above curve we can witness that when the price of the good increases from price p3 to
p2, then the quantity demand for the same good decreases from Q3 to Q2 to Q3 accordingly.
Factors affecting demand shift are as follows:
Taste and preferences: It says that when consumer will like the product he will be attracted to
buy the product and it will be easy for him to do so as he is already in favour of the quality
of product but if customer don't like product the demand will decrease as he will not buy that
specific product because he is not in favour of that good(Ye, and Qiu, 2021).
Income of consumer: It is to be taken into consideration that income is very important aspect of
economics and it the factor on which consumer depends for buying the goods or not, if the
income of consumer is high then he will be able to buy more products but, if the income of
consumer will be low then he will not be able to buy sufficient amount of goods.
Change in the price of related goods: When prices of related goods increase the demand for the
goods which Tesco is providing will increase. And when price of goods that are related to
each other decrease, then the quantity needed of that one product will rise and the demand
for that different good will rise. When the price of substitute goods will decrease , the
quantity demand for that product increase but the demand for the good which is being
substituted will fall