Contemporary Business Economics: Law of Demand and Supply with McDonald's Case Study

Contemporary Business
Economics

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Explain the law of demand & justify the change in the demand curve with the help
appropriate diagram................................................................................................................3
1.2 Define the law of supply, shift in the supply curve & define change in supply curve with
appropriate figure...................................................................................................................6
TASK 2............................................................................................................................................9
Compare & contrast in emerging techniques & models in 21st century economics with those
of the 20th century & define them with practices of business management..........................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Economics is the concept which is concern with wealth, scarcity & choices of resources.
Also finding the ways to reconciling the unlimited wants with the available resources. It is
basically related to the creation, consumption and transfer of wealth and this basically
encompasses the areas of microeconomics that is demand and supply, ensuing the flow of goods
in the target market(Cohen and Flood, 2022). In this report, McDonald's is the considered
business organisation, It is the American multinational organisation which is dealing in fast food
restaurants and headquartered is in Chicago, Illinois, U.S. T his respective report will cover the
concept of demand with its change in law of demand & concept of supply with the change in
supply of given goods in the target market. Moreover, it will compare the emerging techniques
of 20th & 21st century with the modern & advance working of management.
TASK 1
1.1 Explain the law of demand & justify the change in the demand curve with the help
appropriate diagram.
Demand is the concept of analysing the choice and want of the human being for buying
the specific commodities & services also having the capacity to buy the particular commodities
& services in the large market.
Law of Demand
This states that the prices of the commodity that is being purchased by the consumer and
the total amount of demand is oppositely related to each other as rise in the prices of
commodities tends to slow down the entire demand of commodities in the market(Reeves, 2021).
On other hand, fall-down in the prices of goods tends to implied hike in the entire demand of
commodities in the target market. In consideration to McDonald's, favorable prices tends to rise
the overall demand of goods in the target market and vice-versa.

From the above demand curve, it can be illustrated that fall in the demand of goods from
Q2-Q1 is due o the increases in the prices of goods in the target market. With the help of this
diagram, it is clearly integrated that increases or decrease in the demand of goods impact the
overall purchasing behavior of the buyer.
Following are the factors that are affecting the law of demand and also deviates the
demand & they are as follows
 Commodity price: There is the opposite connection in the given prices and the total
amount of goods purchase by the consumer as rise in the prices of products leads to fall-
down the overall demand of commodities in the concerned market whereas the reduction
is the prices of commodities and services make increase in the demand of commodities in
the target market(Tang, Law and Harun, 2022). In context to McDonald's, as the products
are affordable then the demand for such commodities tends to rise in the target market &
in case when the demand for goods which are not affordable due to the high prices then
the respective demand for goods tends fall in the target market.
 Price of substitute goods: These are the commodities which can be effectively changed
by other goods as due to the similar level of satisfaction level which is being get from the
commodities. There is direct relationship in the demand & the prices of the substitute
commodities. In context to McDonald's, rise in the prices of substitute goods for say