Contemporary Business Economics: An Analysis of Debenhams

Contemporary Business
Economics

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
TASK 1............................................................................................................................................1
Explanation of law of demand, movement in demand curve and changes in demand curve......1
Explanation of law of supply, movement in supply curve and changes in supply curve............4
TASK 2............................................................................................................................................6
Traditional economic theories:....................................................................................................6
Modern theory.............................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business economics can be described as field of economics that use different types of economic
theories as well as quantitative method for purpose of analysation of business enterprise and
different factors that contribute to diversity of structure of organisation and relationship of
company with capital, labour, product market (Antonova, 2020). This project report includes
analysation of Debenhams which is a UK based organisation that is operating in department
stores in UK. It was founded in 1778 in UK by William Debenhams. It is providing different
types of products and service to their customers including clothing, household, furniture and
other things. This project report includes explanation of law of demand and movement in
demand curve. It also explains law of supply along with movement in supply curve. Moreover, it
discusses emerging theories and models in 21st century and 20th century.
MAIN BODY
TASK 1
Explanation of law of demand, movement in demand curve and changes in demand curve
Demand can be described as quantity that is willing by consumer and also able to purchase
products at different prices in a given period of time. It can be any commodity that is implied by
consumer for purpose of acquisition of products and service, their willingness as well as their
ability for paying for it.
Law of demand:
Law of demand can be described as an inverse relationship among quantity as well as
price that is demanded for goods (Assaker, 2020). In this, increase in price of goods can results
in reduction of demand as consumer is reluctant for purpose of spending more and more money
for purchase. In same manner if prices of products decrease, it can result in increase in demand
of products and service as in this situation, consumer is more willing to purchase products and
service.
In below mentioned graph, price of products increases from p0 to p1 then it leads to
decrease in demand as demand curve shift from q1 to q0. It also shown in context of Debenhams
where decrease in prices results in increase in demand of products as people can afford these
goods.
1

From above mentioned diagram, it ca be analysed that demand curve is shifting
downward which can be due to inverse relationship among price as well quantity of goods in
marketplace (Balcerzak and Pietryka, 2019). In this, increase in price of a commodity from P3 to
P2 results in reduction of quantity that is from Q3 to Q2.
This case can be applied in case Debenhams in which new launch of range of clothing is
launched every year with this, old collection can be obsolete with time due to change in fashion
trends and consumer choice ( Baporikar, 2018). New collection can lead to higher prices as these
are made according to current market trends. For instance, current collection of the Debenhams
can be of 100USD. If the prices of the products can increase with 150 USD, then it will lead to
decrease in demand of products as all people cannot afford these products. In same context, if
prices of collection of Debenhams is decrease to 50 USD, then it can be affordable by consumer
which increase demand of products.
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