Contemporary Economic Analysis: Illumination of Demand and Supply in FamilyMart

This report explains the two major components of an economy i.e., Demand and the Supply in association to the functioning of FamilyMart. It also highlights the modern as well as the traditional theories affecting the positioning of FamilyMart.

Contemporary
Economic Analysis

Table of Contents
INTRODUCTION...........................................................................................................................3
Illumination of the Law of Demand laterally with its key determinatives.................................3
Elucidation over the conception of Supply and its relative factors in the economy...................7
Unification of the 20th and 21st century's economic hypothesis with nowadays commercial
enterprises...................................................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Economics is concerned with that subject matter which is affiliated to the manufacture,
dispersion and ingestion of goods and services. It is thus an account of how an individual,
businesses, government and a nation makes a decision in respect of apportion of the resources. It
primitively focuses on an assumption that a consumer acts rationally i.e. it achieves the optimal
level of utility or the benefits that can be derived from an activity in an effective manner (Amrin
and Amirullah, 2022). Economics can be bifurcated into two kinds: Micro-economics: Its focal
point is the behaviour of the individual consumers and the producers in an economy. It therefore
tries to evaluate the reason behind the changes in prices and demand of a commodity at a
particular period of time. Macro-economics: This branch of economics deals with the overall
economies on a territorial, national as well as on an international scale. It makes use of an
aggregated economic data to model an economy. This report thus will highlight the explanations
regarding the two major components of an economy i.e., Demand and the Supply in association
to the functioning of FamilyMart. This corporation is Japan's second foremost convenience hoard
chain. The fluctuations that have being experienced by the organisation in respect to the sales is
the major concern of the newly appointed sales manager, Jack Dobb and thus a detailed
investigation regarding the influences will be the focus of the analysis. The relative changes that
take places due to the environmental factors will be elucidated. The modern as well as the
traditional theories affecting the positioning of FamilyMart will further be explained.
MAIN BODY
Illumination of the Law of Demand laterally with its key determinatives.
Law of demand: It expresses that the amount that is acquired by a particular consumer
fluctuates contrarily with the cost of that ware. In basic words, the higher the cost of the good, the
lower the amount that will be requested. This happens because of the decreasing marginal utility,
working in the system which implies that the utilization of the primary units of a monetary decent
gained by the buyer, is to assess their head necessities and later they utilize the added substance
units of a product to serve the unimportant ones. Presently, as the customer esteems the extra unit
fewer and fewer, they in the long run, pay less for that product from there on. We can now get a
demand curve by including every one of the units of a decent that a shopper will purchase at the
given costs. The bend is in every case downwards slanting. Each point on the bend shows the
different amount that are mentioned by the shoppers at a recognized expense. As the price

augmented from P2 to P1, the quantity so demanded ablated to Q2 from Q1. Similarly, the
consumers demands flexure (Q2 to Q3) with a drop-off in the price of the commodity (P2 to P3).
Illustration 1: Demand curve
There either can be a displacement or a motion along the demand curve. Both of these
conceptions can be explained further:
MOTILITY ON THE DEMAND CURVE:
This can come about due to an alteration in the monetary value of a good because of a
compression i.e. decrement in the demand or an elaboration of it. The changes in the
apportionment of price for a trade good doesn't lead to a transmutation but a flimsy motion along
the curve (Ananieva, Gromyko and Susloparova, 2022). The diagram given below can help in
explicating the theorization behind it. An expansion can be acknowledged due to the drop-off in
the absolute price of the trade good i.e. as the price dropped from 10 to 7, a movement along the
curve can be seen from 55 to 75 which is the eventual quantity that is learned due to this
adjustment. Also, because of an increase in the relative price of the good i.e. from 10 to 12, a
contraction can be observed from 55 to 40 in the quantity demanded section.

Illustration 2: Movement along the demand curve
DISPLACEMENT or SHIFT IN THE DEMAND CURVE:
The translation of the curve takes place when the intact demand curve relocate either to the left or
to the right (TAO and DING, 2022). This can occur due to the modifications in the income level
of a user, changes in the predilections of the buyer or an increase or decrease in the prices of a
second-strings present in the market. The illustration given below can assist in knowing it in an
amended way. A transmutation from point A to B can be seen, consequent to an increase in the
order of magnitude of the quantity that has been demanded by the consumer for a peculiar good
i.e. from 80 to 115. This can come about due to multiple accounts that are further discussed
below.

Illustration 3: Shifts in the demand curve
Factors influencing the alterations in the demand curve: The demand of a good reckon upon
various constituents. Getting to know about such elements renders welfare to acknowledge the
predominant tendencies in the market place (Baron and et. al., 2022). The most essential elements
that can be taken into fomentation are as follows-
 Price: There is a reciprocal relationship between the price of a good and its relative
demand. Higher the price, to a lesser extent would be its demand and vice versa. This is
because of the realism that if a consumer would not be in a place to afford the commodity
then its demand will sooner or later decrease in the market.
 Tastes and preferences: Consumers buys what they perceive the most. Their orientation
anticipate upon the a la mode courses that are being preceded in the immediate time.
Their drives changes with time for an array of explanations. Some of the reasons can be
private while the others would be market impelled. With time, the consumers demand
more from their selected brands and they have to transform with the stream in order to
endure in the marketplace

 Consumer's income: Acquisition depends upon the earning capability of a consumer.
The more they will gain, the more their spending would be and vice versa. Evidently, a
consumer disbursement will not be of a appreciable amount during the time of economic
concavity.
 Availability of substitutes: The demand of a merchandise can get replaced by some other
commodity because of this cause. If the consumers are getting a commodity at a
comparative bargain-priced then they will translate their focal point towards that
substitute (Choe and et. al. 2022). For example, coffee and tea are substitutes of each
other. A fall in the price of coffee can increase the demand of tea in the market. Likewise
the demand of coffee will increase with the ascent in the price of tea.
Elucidation over the conception of Supply and its relative factors in the economy.
Law of supply: This proposition possesses a relation of the quantity supplied with the
monetary value at which they are sold-out in the marketplace. The shape of the supply curve
seems to be an ascending diagonal dissimilar to the demand factor, which means that the higher
the price of a commodity, greater the quantity that will be supplied by the producers. The
manufacturers tends to supply comparatively more when there is an increase in the implicit price
of a good because it reasserts the opportunity cost of each accumulative unit that is sold in the
market (Sonora, 2022). The supply curve is a upwardly sloping line whereas the demand curve is
a descending slope which represents the law of diminishing marginal utility as well. Analogous to
the demand interpretations, displacements or a motion along the supply curve can also be
experienced likewise. There are multiple reasons that can influence the alterations in the supply
curve which are discussed below:
Factors determinative to the modifications in the supply curve:
 Production costs- If the production costs flexure, the supply of a commodity will sooner
or later decrease as the enterprises will work in conformity to save the outlay. The cost
will increase with an increase in the labour pay-offs, natural catastrophe such as a crop
failure, increase in the transit costs, fluctuations in the rate of taxes etc.
 Labour and materials- The essential resources that are required for carrying out the
production functions such as the raw materials, labour, equipments and machineries
straight away affects the even-textured working of the establishments. When the factors of

production are easily approachable and that too in the efficient measure, the production
takes place in an impelling manner (Eakin and et. al. 2022),
 Technology- A progression in the technological facets in use can impact the production
of the trade goods which can upshot the increase in the supply of the product. This can
assist in the encouragement of the sales for an enterprise.
 Taxes and regulations- The regularisation of the taxation policy can have an intense
consequence in the supply of a product. When the taxes are elevated by the authorities,
the profit margin of the trade shrivel and as a result the supply reduces.
The point of connexion of the demand and the supply curve is called the equilibrium point. The
price and quantity are respectively noted as the equilibrium price (P) and equilibrium quantity
(Q) at the equilibrium point. The market translates away from this state time to time due to the
different sections affecting either demand or supply side of the industry. When the price of a
commodity falls below P*, the commodity's demand outgrows in the market and in that case the
quantity supplied will not be able to meet the extra demand and in time will result in its deficit.
This will give the producers a welfare of affirmation upon the commodity at an augmented rate
and make earnings. Thus, the prise will then ascent and will motion towards it equilibrium.
Likewise, the situation of excess supply will also be comprehended. In this manner, the market
forces functions in an economy and curb the difficulties of excess demand and superfluous
supply of a commodity.
Illustration 4: Equilibrium in the market

Unification of the 20th and 21st century's economic hypothesis with nowadays commercial
enterprises.
The modern economics pacts along the conjectural prospects of the most conspicuous
turfs of the economic science such as the administration and the accountancy sections that has an
authoritative endeavour towards this domain (Jennings, 2022). In context to the FamlyMart, there
is an abjuratory necessity of an involvement of a suitable postulation through an investigation of
the company's gross productiveness as well as concentrating on the targeted market with regard
to the consideration in respect to the most prominent theories of the 20th and 21st century. This
can be explained further:
TRADITIONAL ECONOMICAL THEORIES
Neoclassical theory: It was pioneered by Carl Mengar and Leon Walrus. Their front-most
interest was on the economic progress in respect to the demand and supply characteristics which
are the cardinal cause for a ceaseless operation in the stream of the goods and services in an
economic system. With an effective utilisation of this consideration, an administration can
possibly exploit the accessible resources in the market place. With the consideration of
FamilyMart, the taste and predilections of the consumers are dynamic in nature which directly
affects the demand factor that is effectually pertaining in the market. The consumers gusto on the
grounds of the in-vogue fashion that are trending which influences the propulsion in an economy.
Keynesian theory: The rational was developed on the grounds of the trading operations that
determines the pays and the charges of the merchandises that needs to be kept static and the
labours so engaged have their absolute focus upon their line of work. This guarantees an
efficacious flow of work in an institution. It consequently makes sure of an alteration in the
effectiveness proportion as well as forming an outstanding impinging over the revenue generation
by an endeavour (Kurz and Salvadori, 2022). In association to the FamilyMart, it is solicitous to
the procuring ability of the customers, anticipated by the prevailing remuneration that are
acquiring by them in terms of their respective jobs.
COMTEMPORARY ECONOMICS
Behavioural theory: The conception was conferred by Richard Thaler. He presupposed that with
the utilization of an efficacious aggregation of both the psychological science as well as the
economical state of affairs, an abstract thought can be drawn out to interpret an individualist

behaviour because of this realistic approach. FamlyMart has significantly carried out this
concoction in savvy to the personnel that are involved in the organisation, done through with
launching an active communiqué passage between them. This contagious virus has
unquestionably convinced the subordinates as well as the supreme realised the chief insinuations
of this intention. This particular conceptualization has assisted in the cohort of receipts with an
affirmative manner.
Nudge theory: This thrifty developed philosophy has an intervened connection alongside an
apparent execution to understand the contemplations in a corrected mode that hugely decides the
judgment made while settling on the central focuses. FamlyMart can make an appropriate usage
of this plan to comprehend the business climate in a thorough way which can help them to keep
down a rational content for their hard-hitting dynamic components. In the continuous pandemic
period, the association can utilize the clarification in such a way that they can meagrely utilize a
singular's ability with an identical spotlight on the monetary feature in order to ensure the suitable
activities in the design (Raj and et. al.., 2022).
CONCLUSION
It can now be reasoned that both the demand and supply are liable for a strong and a swoosh
stream of the assets in an economy. Both of them are the potential factors that straightforwardly
or by implication get impacted by the cost of an item, pay of the purchaser, buying force of the
shoppers, tastes and inclinations and the progressions later on possibilities. There is a backwards
connection between the amount so requested and its particular cost in the economy and
discussing supply, there displays an immediate connection between the amount so provided and
its general cost on the lookout. There are number of variables that influences the stock side of an
item for example the expense of the creation, innovation utilized, number of firms, and the
competition that exists. The speculations that were talked about, helps an organization or an
association to guarantee that their vision is clear and the cycles so happens are considerate to the
improvement in the economy.

REFERENCES
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