Explaining the Law of Demand and Supply in Contemporary Business Economics

Contemporary Business
Economics

Table of Contents
TASK 1............................................................................................................................................3
1.1 Explain the law of Demand, movement along the same demand curve (with the aid of
diagram) and changes in demand curve (with the aid of diagram)..............................................3
1.2 Explain the law of Supply, movement along the same supply curve (with the aid of
diagram) and changes in supply curve (with the aid of diagram)................................................5
TASK 2............................................................................................................................................8
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...............8
REFERENCES..............................................................................................................................11

TASK 1
1.1 Explain the law of Demand, movement along the same demand curve (with the aid of
diagram) and changes in demand curve (with the aid of diagram).
Demand is a concept which is defined as the amount of service are good consumers are willing
to pay. The concept of demand depends upon needs and requirements of a customer. It can be
differentiated between a need and want. As per the concept of economist, it is evaluated that
demand is based upon wants and needs but they both are the same thing. Demand totally based
upon the ability for a person to pay (Chi, Huang and George, 2020). If a person is not able to
pay for the product, then it is having no effect if demand. On the other hand, what a buyer is
paying for deeper unit of particular goods or services known as price . the total number of the
amount of units purchased for the particular product or service is known as the quantity
demanded. When there is rising price of gold or service then it is mostly being called us
decreasing the quantity of that service or good. On the other hand, when there is a fall in price
then it will increase the quantity which is demanded. When the price of gallon of gasoline is
increased then it can be stated as an example that people are looking for minimising the
consumption by combining other products. All they can be mass transport for taking weekend
and vacation trip foreclosure at home. According to the concept given by economists, it is said
that there is inverse relationship between quantity and price demanded the law of demand.
According to the law of demand it is stated that all the other variables which are affecting
demand are known to be constant. An example of the scenario is given in the following table

Figure 1Demand curve
(Source: Demand concept, 2019)
The demand curve is shown which provides relationship between quantity and price on the basis
of graph. As per the demand schedule, it is stated that when price rises then quantity demanded
declines. It is stated that price connected the demand curve will provide the inverse relationship
between quantity and price that is demanded. Demand curve will affect the product in oh man
are. It can be appearing relatively for flatter steep or it can be straight or curved (Cohen, 2021).
There are different demand curves which share fundamental similarity that is slope down from
left to right. According to this basis, it is can be said that demand curves embody Law of
demand. This can be stated that when price increases then quantity demanded declines. It can be
stated that the need of understanding difference between shifts and cause and movement along
the cars on the basis of demand and supply are totally dependent upon the quantity which is
demanded. When there is change in demand it refers to all slight shift an entire demand car. It
can be varied according to the different factors knowingly income, preference, substitute product
price, population. When there is change in quantity demanded then it refers to the movement