Economics for Business: Market Equilibrium and Government Intervention

Economics for business

Executive summary
UK has market oriented economy and government only intervene in the marker for the
purpose of social welfare and to restore the equilibrium in the market that cause due to many
factors which can not be control by market forces. This report has been develop keeping the view
of economic principles of many demand and supply that used impact on food industry. Apart
from that principles of market failure has also been evaluated and policies that is adopted by the
government to improve the situations. So, some of the intervention has been maintained by the
UK government for the purpose of short-term equilibrium and to make the industry strong.

Table of Contents
Executive summary..........................................................................................................................2
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Supply economic theory..............................................................................................................4
Demand economic theory............................................................................................................6
Market equilibrium......................................................................................................................7
Shortage and surplus....................................................................................................................9
TASK 2..........................................................................................................................................10
Market failure.............................................................................................................................10
Policies adopted by the government to address market failure..................................................11
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
Economics refers to the social science that concerned with the production, distribution
and consumption of goods and services to study how individual make choices and make
allocation of resources. Study of economics focuses on the human being and based the
consumption that act the human needs and will lead to optimal benefits. Market equilibrium gets
disturbed through many external and internal factors that are managed by the forces and they
have own the intervention in the food industry in the UK and impacting factors that was being
impacted Brexit and Covid-19. These factors create many imbalances that was being render by
the government of manage social situation. Many situation has been arise that used to impact the
lot to the economy and leads to many changes in the nation and evaluating the condition of the
organisation is being done or created by the government.
TASK 1
Supply economic theory
According to the Krugman and Wells, supply in the market has created lots of producers
that used to produce the commodities and were ready to supply those commodities on the
specific price in the market. In the market condition, sellers were willing to supply more
commodities at higher price that indicate th positive relationship between the price and quantity
supplied. This kind of nature will serve the graphical representation of the relationship and that
behaviour is shown in the supply curve that is has an upward slope.
Movement in supply curve