Contemporary Economic Analysis: Demand, Supply, and Modern Business Practices

This report analyzes the law of demand and supply, their movements and variations, and evaluates the theories of 20th and 21st century related to modern business practices. It focuses on FamilyMart Company, Ltd, a Japanese convenience store, and covers the concepts of neoclassical theory, Keynesian economics theory, behavioural theory, and nudge theory. Course code: BM533, Course name: Contemporary Economic Analysis, College/University: Not mentioned.

BM533 Contemporary
Economic Analysis

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Describe the law of demand, movement along with the demand curve and change in the
demand curve by using the appropriate diagram........................................................................3
1.2 Define the concept of law of supply with its movement in the supply curve and also
change in the supply curve with the use of appropriate curve....................................................6
TASK 2............................................................................................................................................9
Critically evaluate the theories of 20th and 21st century which are related to the modern
business practices of an organisation..........................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Economics is the social science that seeks to describe and analyse the production,
distribution and the consumptive of goods and services so that they can perform the certain task
which contribute to the welfare of an economy of the country. Demand & supply are the two
wheels of economy that is concerned the appropriate flow of goods in the large
marketplace(Martek, 2022). As this is also necessary to have the better approach in the
marketplace by which they can buy the commodities that are affordable to them, backed wit their
sufficient buying capacity. For this report, FamilyMart Company, Ltd is the Japanese
convenience store which are operating as the second largest store chain. They are having
approximately 24, 574 stores in various areas of the globe. This particular report will analyse the
law of demand & its respective movement in the demand curve. Furthermore, this will consider
the law of supply curve and they are facing various change in the given supply curve. Lastly, this
will cover the two emerging theories or concept of 20th and 21st century and also make
comparison of them.
TASK 1
1.1 Describe the law of demand, movement along with the demand curve and variation in the
demand curve by using the correct diagram.
Demand is the economic principle refers to the desire of the buyer so that they can buy
particular goods & services, also they are having the buying capacity to have the particular
commodities. There is no such variation in other factor, rise in the given pries of commodities or
services.
Law of demand:
This is defined as the state in which there is the opposite connection in the given prices &
the particular quantity of products and services in the target market(Devine and Ash, 2022). All
the aspects remain constant, this implied due to change prices of particular products and the
quantity of goods and services in the target area. When the given prices of goods tends to rise as
given in the demand curve from p0 to p1 then its leads to downfall the respective demand of
goods and it reduced from oq0 to oq1 in the target market.

From the given demand curve, it is shown that decrease in the price of products tends to
increase the demand of commodities due to having opposite connection in the demand & prices
of any given commodity. For say, when the demand of products tends to rise from p2 to p3 then
the respective demand decreases from q3 to q2.
There are certain aspects that is influencing the quantity demand of commodities in the
market which are given below:
 Product's price: this says that when the given prices of the goods rises then it directly
impact to decrease the entire demand of commodity in the target market. It is the human
behaviour that consumer always purchase the goods and services at affordable goods in
an cost effective manner.
 Variation in future expectations: This factor defined as the aspects which is leading to
have the consideration in the given marketplace, as there is the direct relationship with
the availability of commodities in the market. In consideration to FamilyMart, when the
people are expecting any change in the certain prices of commodities they fluctuate their
demand accordingly in order to full fill their needs and wants.
 Price of complements:These are the goods which are being used as the conjunction of
another commodity and this is being said that when the prices of complements increases
then its lead to increases the demand of current products in the target market. In

consideration to FamilyMart, when the prices of commodity expected to increases in near
future then the demand for the goods in the recent time also increases and vice-versa.
 Income level of buyer: There is the direct link in the income & the demand of products
& services, when the individual is earning goods and they are high income level then the
demand for respective goods tends to increase in the given marketplace. Rise in the
income implied rise in demand for premium goods and fall in the income tends to
increase the demand for inferior goods(Achiume and Lake, 2022). In context to
FamilyMart groceries, increase in the income level tends to rise in the demand of
products in given market.
 Taste & preferences of buyer: People are having their own choices and preferences as
per the changing market scenario and the emerging change in the marketplace. In respect
to FamilyMart, when the consumer is having the favourable demand of goods then the
demand tends to rise as people will like the offering of company.
 Price of substitutes commodities: These are the goods which can be settled by other
goods as they are offering similar level of satisfaction to the consumer. When the price of
own goods tends to increase then the demand for other commodity increases as people
always chosen cost effective products to them in the large market.
Change in demand curve:
This is refereed to the shift in the entire demand curve to the variation in the various
factors which are influencing the overall demand of commodity in the given marketplace. These
are the aspects which includes the variation in the price, income, taste & preferences and the
given prices of offerings which are sell by FamilyMart. In these circumstances, demand curve
will shift to left or right in the marketplace.

As above stated diagram, it is being said that, variation in the entire demand curve can
leads to shift the demand curve to the rights due to reduction in the prices of commodities in the
target market (Opeskin, 2021). In relation to FamilyMart, the initial demand of goods is d0 and
change in the demand which shift to d2 or d1. This is due to the change in the price of
commodity, income of consider and the future expectations and many more.
1.2 Define the concept of law of supply with its movement in the supply curve and also variation
in the supply curve with the use of correct curve.
Supply defined as the total available amount of commodities and services for the further
sale to their prospective customers. Moreover, this defines the available amount of commodities
at the particular prices which are shown in the given supply curve.
Law of supply:
The Law of supply states that, there is the direct link in the supply and the prices of given
commodities in the target market. As the prices of products tends to rise then the suppliers rise its
supply in the market so that they can generate more revenue ad profitability in the given market.
Whereas, when the given price of goods tends to fall in the given marketplace then the supply of
goods also decreases as the supplier do not sell their goods in lose. In consideration to
FamilyMart, when the price of commodity and services tends to rise then the particular supply of
goods also rises.

As above stated diagram, this is said that the supply of commodities is downward sloping
that is showing the direct link in the supply and the price of goods in the target market. As per
the given diagram, this is shown that the prices was at p3 then the supplier are offering supply
which is at q3 but increase in the given prices level of goods to p2 implied increase in the q2 in
the target market with the aim of generating more revenue in the given marketplace.
There are various element which are affecting the supply of commodity in the market and
these are illustrate further:
 Overall cost of production: when the company is offering the goods and services as
they are having the sufficient aspects of production that involves the raw material and
employees who all operate the given task in an appropriate manner. Sufficient availability
of products and services leads to increase the supply of commodities in an appropriate
manner and vice-versa (Reisman, 2018). In relation to FamilyMart, when the company
do not have the sufficient raw material which leads to down fall the supply of
commodities in market.
 State of technology: These are the factors which includes the innovation which is meant
by supplier so that they can increase the overall sale of commodity, In consideration to
FamilyMart, when an organisation is using the upgraded machine and advanced method
of production then they can full-fill the supply of goods in the marketplace.
 Subsidies offered by government: These are the extra benefit which is offered by the
government of country and in consideration to supply, rise in the subsidies leads to

reduce the overall cost of products and they tends to supply more with the sole aim of
generating more revenue in the target market. For instance, reduce the tax rate of Japan
can increase the entire supply of commodity in the marketplace.
 Weather: These are the factors that is having the direct connection in the entire
functionality of the venture. In respect to FamilyMart, they are operating its food
products as well and changing weather directly impact the supply of goods.
 Firm's objective: These are the two types of firms which are profit oriented or voluntary
firms. When the company try to increase its profit which reduced the supply as the given
price of commodity is not high as it is the main consideration which rise its revenue and
overall profitability.
 More than a firm: There are many firms which are impacting the supply of commodity
and services in the given marketplace(Langevoort, 2022). In relation to FamilyMart,
increase in the number of competitors can minimise the supply of commodity. On other
hand, reduction in the similar types of firms tends to rise the entire supply of goods in
the market.
Change in Supply Curve:
This is refereed as the shift in the supply curve with the change in the certain aspects
which includes the taxes, production cost, technology etc. this is clear that when the supply of
goods rises then the supply curve will shift from s0 to s1 as they are using better services to their
prospective buyer in the given marketplace. On other hand, decrease in the supply curve make
shift the supply curve from s0 to s2 due to insufficient raw material and other aspects.

From the given diagram, it is shown that the rise in the prices of commodities tends to
rise the overall supply of products of FamilyMart & whereas, decrease in the supply curve will
shift from s0 to s1 and reduction in the prices of products tends to reduces the overall supply of
commodity in the market.
TASK 2
Critically evaluate the theories of 20th and 21st century which are related to the modern business
practices of an organisation.
Contemporary economics involve the certain theoretical with the appropriate research in
the field of economic, accounting and management which influence the overall working in an
economy. In consideration to FamilyMart, they basically consider the entire productivity and it is
significant to the target market which are emerging in the 20th and 21st which are illustrate below:
Traditional Economic Theories
Neoclassical theory: This is launched by Carl Menger and Leon walras. It is basically
concern on the demand & supply that are the main components in order to operate the flow of
commodities in the economy by which an organisation can make the effective use of
commodities. In relation to FamilyMart, individual are having their integrated choices and their
preferences. People are having the variation in the demand of goods and services of current

consumption as the individual are using goods and services to the entire business model in the
market.
Keynesian Economics theory: this is the theory which is related to the workers who are
operations of employees on analysing the wages and prices of commodities which are fixed and
employees are dedicated to the work and emphasis on better operations within the organisation
so that they can generate the profitability & revenue in the target market which is being
impacted. Furthermore, this is related to the macroeconomics & also involves the minimisation
in context to the consumption and the purchasing power of the individual. There is no change in
the certain factor which are given prices and the wages which is having main impact in the
market and also shows the entire profitability of the business.
Contemporary Economic Theories
Behavioural theory: This is the theory that is introduced by the Richard Thaler & having
the better consideration & the combination of psychology and the economic business
environment by that they can effectively understand the main reason to have the good behaviour
by the people who are operating their business in the real world. In context to the FamilyMart,
they are understanding the behaviour of the employees as they are helpful in better
communication(Feng and et. al., 2021). During the Covid-19, this particular theory is being
based and introduced by the individual who are having the main aim to generate more profit by
minimising the entire business cost.
Nudge Theory:this is the concept that is related to the indirect suggestions with the
better enforcement by which they can analyse the behaviour of individual for having certain
goods decision-making. In context to FamilyMart, this helps in better understanding for business
environment so that they can have the automatic cognitive process for the better decisions-
making. During the global pandemic, they can access the better use of theories by that they can
effectively use the individual and they are more concern about the financial consideration by
which they can have the decision-making of the individual.
CONCLUSION
This is concluded from the above report that economics is the subject matter which
focuses on the supply and demand of given goods in the target market so that they can ensures
the flow of commodities in the economy. These are the elements which is influencing the entire
demand of commodities in the target market which includes, price of commodity, income of

buyer, taste and preferences and future expectations. Supply is defined as the fundamental
concept in which prices and quantity supply is having the direct relationship in the target market
by which they can ensures the better consideration to the goods and services to them. There are
various aspects which is impacting the entire supply of goods which are cost of production,
technology used, nature of firms and number of competitors. Lastly, Neoclassical theory,
Keynesian Economics theory, behavioural theory and Nudge theory are being used by an
business organisation by which they can contribute to the development within the economy.

REFERENCES
Books and Journals
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Opeskin, B., 2021. Rationing Justice: Tempering Demand for Courts in the Managerialist
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Shapiro, D.B., 2018. Payment to egg donors is the best way to ensure supply meets demand. Best
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