Contemporary Business Economics: Law of Demand and Supply

Contemporary
Business Economics

INTRODUCTION
Contemporary business economics include the various issues which affect the business
operations and further affect the demand of goods & services which organizations offer. Due to
economic issues, businesses struggle the most that also affect the productivity as well as
profitability (Amankwah-Amoah and Wang, 2019). For the better understanding of demand or
supply concept, this project report select the Tesco Plc which is UK based retail company. This
report based on the economic theories such as law of demand or supply of demand. Relation
between the price or quantity represent with the help of demand curve and which factors affect
the most to shift the entire curve. On the other hand, this report discussed about the law of
supply, supply curve and identify factors which affect the supply curve. With the help of demand
and supply theory, individuals as well as researchers able to understand that how market
response and what are the factors rather price which influence the demand of consumers and well
as supply of organizations.
MAIN BODY
TASK 1
1.1 Explain the law of demand along with demand curve and the factors which impact the
demand curve to change
Law of Demand: It is one of the fundamental factor of economy which help the
organizations to understand the demand of their products. This law shows the relations between
price of product and the demanded quantity. Price and quantity of goods has inverse relationship
because when price increases than demand of goods reduces. Therefore, fall in the price will
maximise the demand (Coad, 2014). It is the natural human behaviour which consumers follow
at the time of taking buying decisions. In context of organizations, when price of Tesco's
products raise than demand will fall and similarly when price reduces than demand will increase.
Research & development team of Tesco need to understand this economic theory and take
further actions or strategies accordingly.
Demand Curve: It is an visual representation which help the individual to understand the
how many units of commodities will be purchased at possible price. Demand curve represent the
relation among demanded quantity and price of goods & services (Demand Curve, 2019). It is
the table which indicate that how many products or service individual can acquire at different