Contemporary Business Economics: Law of Supply and Demand, Emerging Theories and Models in 21st Century vs 20th Century

BM533 Contemporary
Business Economics

Contents
INTRODUCTION................................................................................................................................4
MAIN BODY........................................................................................................................................4
1.1 Explaining the law of supply, factors causing movement along the same demand curve and the
shift in the demand curve......................................................................................................................4
1.2 Explaining the law of supply, factors causing the movements in the supply curve and shift in
the supply curve................................................................................................................................7
TASK 2..................................................................................................................................................10
Comparing and contrasting the emerging theories and models in the 21st century economics with
the 20th century...............................................................................................................................10
CONCLUSION.......................................................................................................................................12
REFERENCES..................................................................................................................................13
INTRODUCTION
Business economics refers to the area of the applied economics which used
to study the financial, market-related, environmental and organizational issues faced
by the organizations. It includes the process such as concept of scarcity, distribution,
consumption, etc. Contemporary issues in the economics are related to the
management of the human resources, production, marketing and operations of the
business. This report will outline the meaning of aw of demand and the factors which
causes the movement along the demand curve with the help of diagram. Further it
will outline the factors which used to shift the demand curve to the new position with

the help of diagram. This report will also evaluate the meaning of law of supply and
the factors which are causing movement along the supply curve with the help of
diagram. At last it will outline the factors which shift the supply curve to the new
position.
MAIN BODY
1.1 Explaining the law of supply, factors causing movement along the
same demand curve and the shift in the demand curve
Law of demand
Law of demand is referred as the fundamental principle of the economics. It
basically works with the law of supply which makes the know about the market
conditions. This also explains the market conditions in order to allocate the resources
and used to determine the prices of the given goods and services in our day-to-day life.
This states that the quantity of the products is inversely related to the price of the
products (Inoua and Smith, 2020). It means products which are having higher prices
having the lower demand in the market and the products having the low prices having
the high demand in the market. This happens because of the diminishing marginal
utility, that means the consumer will satisfy his urgent needs first and then he will add
the extra product in his consumption. As demand is the important factor in the market
level and at the personal level also. It makes the people to know that the other factors
are remain constant and there will be inverse change in the prices and quantity of the
product and services. It also refers that when the value for the one product increases
than the quantity and demand for that product will fall (Allen, 2019). The law of
demand is important to identify the opportunities to buy those goods which are under-
priced. The demand curve of the law of demand is sloping downwards as prices and
quantity are inversely related.
Factors causes movement along the demand curve
Movement along the demand curve shows the change in the price and
quantity demanded in the market, from one point to another point. Other things
remain constant when there is change in the quantity with the change in the price of
the goods (Dinga, 2018). The movement in the demand curve is only due to the