Contemporary Business Economics: Demand, Supply, and Emerging Theories

Contemporary business
economics

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
1.1 Law of demand with demand curve and changes in the demand curve by using diagram...3
1.2 Explain the law of supply, movement along with the supply curve and also explain change
in supply curve with suitable diagram........................................................................................6
TASK 2............................................................................................................................................9
2.1 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 .............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Business economics is the concept that involves the fundamental studies about the
financial management in market that are linked with the environmental problems that are faced
by management. It also deals with the concept of deficiency of the resources and maintain that
how they can be efficiently use (Benuyenah, 2021). The management consider in this report is
Tesco. It is a multinational supermarket in the United Kingdom that was founded in the year of
1919. The following project covers the law of demand and supply that are explained and also
evaluate several changes that follows in demand and supply. Hence, it also follows the theories
that are increasing in 20th an 21th century in contemporary world.
TASK
1.1 Law of demand with demand curve and changes in the demand curve by using diagram
The demand is an aspect that define individual's desire to purchase specific goods and
services. They have the willing to pay price for that specific product in large market (Buigut,
Kapar and Braendle, 2020).
According to the law of demand there is an inverse relationship between price of the
goods and a particular quantity of goods as they remain constant without any change in other
factors. For instance, it the price of any goods increase from the p0 to p1, then it show demand of
the commodity fall down from the q0 to q1. It reflect that the customer only purchase goods
when its price is low and get what they are pay for the given goods. In context of Tesco, if the
price of its olive oil is rise then its customers will not purchase the olive oil and mover to other
brand or commodity.

According to this diagram, it is reflected that with the sloping of demand curve
downwards,, the price of given commodity increase from the p3 to p2 that effect a decline in the
commodity's demand at market place from the Q3 to Q2 and move to q3 or vice versa (Kalbasi,
Shahsavar and Afrand, 2020).
The factors effecting demand of particular commodity are given below:
 Price of the substitute goods- In this, the goods can be replaced by the another goods
and having an inverse relationship. The demand of a goods is also impacted by the price
of other goods as substitute. For instance, when the price of olive oil tend to decline then,
de mad of such commodity tend to a rise or vice versa.
 Price of the complementary goods- In this, the goods are consumed as the conjunction
of other product. If the price of goods decrease then quantity demand of on increase with
the demand of other. With increasing in the price of pasta demand of the olive oil fall
down (Masarek, 2019).
 Number of buyers in market- If there are few number of consumers in market then it
impact the demand of product it will lead to low level of demand. Whereas if there are a
large number of customer then there is a high level of demand. In case of Tesco, more
buyer lead to high demand of its product in retail market.