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Economic For Business Assignment - Polo mint

   

Added on  2020-11-12

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Economic ForBusiness
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Table of ContentsINTRODUCTION...........................................................................................................................1TASK...............................................................................................................................................1Supply and demand analysis to investigate and understand the operation of markets...............1CONCLUSION................................................................................................................................7REFERENCES................................................................................................................................8
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INTRODUCTIONSupply and demand are considered as two most important terms in economy, that helps inunderstanding the operations of marketplace. Here, supply defines the amount of somethingwhich is available in market. While, demand describes the amount of certain goods that peoplewant to complete their desires (Lloyd-Jones and Lewis, 2017). This would lead to develop amarket in which economical activities between sellers and buyers are done. Thus, behaviour ofbuyers and sellers as a group, help in determining overall supply and demand for a particularproduct at different prices. This assignment is going to make a discussion on demand and supply analysis. Thiswould help in understanding the market operations and economical activities. In this regard, howsuch analysis impacts on price of good, Polo mint is chosen which is first time manufactured inUK, by Nestle Brand. This peppermint flavoured Polo is introduced in 1948, with a tag line“mint with a hole” (Joyce and Paquin, 2016). In this report, primarily focus is given on factorsthat leads to change in demand and supply, as well as how the same impact upon price. TASKSupply and demand analysis to investigate and understand the operation of marketsSupply and demand are the most important fundamental concepts of economics, which isconsidered as backbone of economy also. Here, demand shows how much quantity of aparticular product or price is desired by a large group of buyers (Lloyd-Jones and Lewis, 2017).It is also defined as amount of products that customers are willing to purchase on a certain price.Therefore, relationship between quantity and price reflects the demand relationship. While,supply of a commodity defines how much a particular market can offer the same (Supply &Demand: How Markets Work, 2015). With this assistance, quantity which is supplied showsamount of a specific good which producers are willing to supply for receiving a particular price.This kind of correlation between price and quality of supply goods is known as supplyrelationship. Henceforth, price is considered as a reflection of demand and supply, that underliethe forces behind resources' allocation. In this regard, within theories of market economy, supplyand demand theory help in allocating resources in most effective and efficient manner (Kugler,2018). In context with Polo Mint which is a brand of breath mint, changes in demand and supplycurve impact upon its price also. This affect can be better illustrated by understanding some basic1
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terminologies of economy. It includes market equilibrium where shift in supply curve or marketdemand will fluctuate the equilibrium price of Polo Mint. The demand and supply curve mainly represents the market equilibrium, whereintersection of curves shows at which point, quantity of a particular product is supplied tomarketplace equals to quantity demanded by customers. In this regard, any changes in pricingstrategies leads to create difference between supplied and demanded quantities, either in asurplus or shortage manner (Sodeyfi, 2016) . For an instance, setting up a price of product abovemarket equilibrium will lead to reduce quantity demanded as well as an increase in quantitysupplied. This lead to excess supply or supply quantity in a surplus and vice versa. (Source: Economic Equilibrium. 2016)Any shifts of market demand or supply curve will lead to make alteration in equilibriumprice also. Here, if market demand decreases then equilibrium price will also reduce (Sodeyfi,2016). This price decrease lead to a movement along supply curve with a reduction in quantitysupplied. Therefore, by examining this market demand and supply, it should be kept in mind thatthere are various factors present in economy that result in impact the outcome of marketplace(Vivchar, 2016). Here, government intervention is considered as best example that results toenactment of price ceilings or price floors. Similarly, there are certain variables for example,2Illustration 1: Economic Equilibrium
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