Contemporary Business Economics: Law of Demand and Supply

Contemporary Business
Economics

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
TASK 1..........................................................................................................................................................3
1.1 Explain the law of demand along with demand curve and the factors which impact the demand
curve to change.......................................................................................................................................3
1.2 Explain the law of supply by supply curve and also define the factor which change the supply curve
.................................................................................................................................................................6
TASK 2..........................................................................................................................................................9
Comparison and contrasting of theories and models in 21st century with 20th century and application
of them in modern business practices.....................................................................................................9
CONCLUSION.............................................................................................................................................12
REFERENCES..............................................................................................................................................13

INTRODUCTION
Contemporary market economics covers the specific problems that impact company
activities and then further influence the demand for products and services that companies
provide. Because of economic challenges, corporations suffer the most, which also impacts
efficiency and also competitiveness (Morgan, 2016). Business economics is an area of study
economies that utilizes economic principles and statistical approaches to review financial
organizations and contributing factors to the complexity of governance forms and corporate
interactions with labor, capital and commodities prices. To complete this project select Sainsbury
which is retail sector business. It is second largest chain of super markets in the United Kingdom.
This report mainly based on the economic theories and principle. This report contains law of
demand, law of supply and factors affecting to shift curve. Moreover, Using demand and supply
theory, both consumers and analysts are able to comprehend how customer reaction but what are
the variables that impact economic growth and organizational availability, instead of quality.
Along with, compare and contrast of emerging theories and models in 21st century.
MAIN BODY
TASK 1
1.1 Explain the law of demand along with demand curve and the factors which impact the
demand curve to change
Law of demand: This is one of the main economic factors that helps companies recognize
their commodity demands. This law demonstrates the relationships between commodity price
and the equilibrium quantity. Price and quantity of goods have a negative correlation, since the
demand for products declines as price increases. The decrease in the price therefore would
increase demand. It is the common biological behavior that clients expect when having taken
purchasing decisions. As far as companies are concerned, when the price of Sainsbury's goods
increases above demand, and likewise when prices decline than demand falls. Sainsbury's
research and development activities department needs to consider this economic principle and
take specific steps or approaches as necessary.