Report on Economic Policy and Health Issues

Economic Policy and Health
Issues

TABLE OF CONTENTS
INTRODUCTION................................................................................................................................3
TASK 1.................................................................................................................................................3
Supply and demand analysis outlining factors with reference to change in price .....................3
TASK 2.................................................................................................................................................6
Main economic policies that the government can use to reduce obesity....................................6
CONCLUSION....................................................................................................................................9

INTRODUCTION
Obesity is an increasing phenomenon which gas emitted different diseases and also affected
people's lives in unhealthy way. The government has enacted several laws. Regulations, policies,
rules to make sure that people live a healthy life with no diseases. This report deals and inculcates
the obesity disease and also supply and demand curve analysis when a shift is occurred and price of
the commodity is changed (Ehrenberg and Smith, 2016). These shows that price is affected by
several factors and makes price fluctuates in many ways. Also, when demand decreases, supply
curve initiate change and vice-versa is observed. In respect of obesity, economic policies have been
enacted from time to time by the government. These policies make ensure that people understand
their importance of life and reduce consumption of highly saturated products. These inculcates
negatives aspects which government tries to diminish them at least possible manner.
TASK 1
Supply and demand analysis outlining factors with reference to change in price
The supply and demand of a particular commodity is derived by its price. It can be implied
that price is the mechanism which determines supply and demand of particular product. The price is
discovered and is based on the supply and demand (Bowen and Sosa, 2014). Goods will be sold
when the buyer and seller of the commodity meets in the market and they agree on the particular
price. When exchange occurs, the agreed price which correlates to buyer and seller is known as
equilibrium price.
When either of demand or supply shifts or change occurs in the market, then equilibrium
price will get affected and it will get changed.
The demand and supply curves are drawn in X and Y axis. The demand curve denotes
quantity demanded on x axis and supply curve denotes price of the commodity on y axis. For
normal goods, as the quantity demanded falls because the price rises and which shifts demand curve
from the left to right on the graph. Now, supply curve also initiates changes when demand curve is
shifted (Manacorda, Sánchez-Páramo, and Schady, 2010). The supply curve, on the other hand, has
an adverse effect on the price goes up and demand decreases as the curve move from right to the left
which is for luxury goods. This results in the market equilibrium which is market price and quantity
of the concerned commodity which is bread in the current situation.

Figure 1: Change in equilibrium price
(Source: Supply and Demand Curve for Price, 2017)
This figure 1 explains about the shift in demand and curve analysis of the equilibrium price
which is affected by demand and supply factors. This can be explained by an example like of bread
purchase. Throughout the year, season is moderate and no changes occurs in demand and supply
curve (Vivekananthan, Mishra, Ledwich, Li, 2014). However, when supply increases in the market,
more quality of products ranges are available for consumers of commodity. As if now, nothing is
observed related to increase in demand of the product, there will be a shift in demand curve to a
new equilibrium price. This will take place to clear off supplies of product in the market. This
reflects and changes occur and consumers will buy only when price of product is reduced. This will
initiate shift in demand and supply curves as consumer preferences will fluctuate.
The price is key factor which changes demand and supply curves. Apart from it, other
factors contribute to the shift of demand. They are income of customers, price of substitute product
available in the market , consumers taste and consumer preferences (Ruttan, and Thirtle, 2014). The
supply curve is affected by price of substitute products in the market and available technology
which competitors has in order to have efficiency in their production. These factors initiate shift in
demand and supply curve. These have following parameters which affect shifts in both curves, they
are:
 If there is increase in demand, then curve shifts to right which leads to increase in price
 If decrease in demand is observed in particular commodity, then demand curve shifts to left
which leads to price decreases
 If there is increase in supply, then supply curve shifts to right which leads to decrease in