Contemporary Business Economics

CONTEMPORARY BUSINESS
ECONOMICS

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
INTRODUTION..............................................................................................................................1
TASK 1............................................................................................................................................1
1.1 Law of Demand and the movement along demand Curve and changes in the Demand curve
.....................................................................................................................................................1
1.2 Law of Supply and the movement along Supply Curve and changes in the Supply curve...4
TASK 2............................................................................................................................................7
2.1 Comparing and contrasting emerging theories and models in the 21st century with 20th
century and relation to modern business practices......................................................................7
REFERENCES..............................................................................................................................10

INTRODUTION
Business economics is field of the applied economics which studies financial, market
related, organisational and the environmental issues that are faced by the companies. In
broad sense the economics is referred as study of functions and components of the particular
economy or marketplace like demand or supply and impact of concept the scarcity. In
economics, distribution, production and the consumption are the important subjects of the
study. The business economics focus over elements and the factors within the business
operations and how they are related to economy as whole (Černeand et.al., 2017). Field of
the business economics address principles, standard business practices and overall
management strategy. Demand & Supply analysis is fundamental to the business therefore
every organisation is required to understand the impact and dynamics. The current report
will provide explanation on law of demand, law of supply and movement along the demand
curve and supply curves along with the diagram and impacts over H&M company. It will
cover comparison of the different theories of 20th and 21st century in the contemporary
business practices.
TASK 1
1.1 Law of Demand and the movement along demand Curve and changes in the Demand curve
Term demand is used by the economists for describing amount of products or services the
customers are able and willing to purchase at different prices. The demand is based over wants
and needs of the customers. Demand is based over ability of paying. Demand curve shows
relationship between the quantity demanded and price on graph.
Law of Demand provides that the other factors remaining constant, the price as well as
quantity demanded for the goods and services are related inversely to one another. When product
rises demand for same product will be falling. The demand law explains choices, consumer
behaviour with the change in prices. In market, other factors influencing demand remaining
constant, when price of the products rises, it will lead to fall in demand of the product
(Adamczak and et.al., 2016). This is natural behaviour of consumers. It happens as consumer
hesitant in spending more for good with fear of becoming out of cash.
Law of demand provides other factors being equal, quantity bought of the goods or
services are functions of price. To the extent nothing is changed, people will be buying less of
products of H&M when price rises and buy more when the price falls. Demand schedule
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provides us exact quantity which will be purchased over a given price. Quantity is plotted on x
axis and price is plotted on vertical y axis.
It could be viewed from above graph that, slope of curve is downward sloping always due
to inverse relation which is shown between the commodity and the price. As price is increased of
commodity from the P1 to P2, demands could be viewed as declined from the Q1 to Q2 thus the
proving inverse relationship.
Movement along demand curve:
Keeping other factors constant, there is change in the demand of commodity because of
change in the demand of commodity because of change in prices, it is known as change in the
quantity demanded (Demand Curve, 2019). This is known as movement in demand curve in
graphical presentation. In scenarios where only impacts of the price are taken into consideration,
observing change in quantity demanded of the particular products and the ups & downs in the
graph are known as the movement along demand curve (Conroy and Weiler, 2016).
Upward movement of the demand curve: It is seen when price of commodity of H&M increases,
quantity demanded decreases. This causes an upward movement of demand curve which is also
called contraction of the demand.
Downward movement of the demand curve: It is seen when price of commodity decreases,
quantity demanded increases. This leads to downward movement of demand curve that is also
called expansion of the demand.
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