Factors Affecting Price of Commercial Properties in UK

Economics for Business

INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. Determined the factors which affect the price of commercial properties in UK.....................1
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business economics seems to be a area of applied economics is the application companies'
political, managerial, business and environmental problems. Economic analysis and quantitative
approaches form the foundation of analyses on issues that impact companies such as
organizational administration, management, growth and policy (Economics, 2020). "Commercial
property contributes to real property that used during industry. It typically refers to facilities that
contain enterprises, but may also apply to land that are meant to make a income, as well as
broader private rental houses. This essay is based on commercial properties in the UK is based
on supply and demand theory and economic concepts to the market. Study of supply and demand
helps one to analyze and recognize business working.
MAIN BODY
1. Determined the factors which affect the price of commercial properties in UK
There are several factors which affect the price of commercial properties in the UK, for the
better understanding of this concept, demand and supply analysis is essential to evaluate before
considering the determinants of commercial properties. These are as follow:
Law of demand: In the corporate world, acknowledging and applying demand concept is one of
the most critical concepts for organizations (Law of Demand, 2020). This refers to the
unfavourable or the opposite relation between price and quantity demanded for a product. This
states that consumers are consuming more often when prices drop while buying less as prices go
up. Higher price of commercial properties will contribute to reduced demanded quantity of
properties in the UK. Through the other side, a decline in prices of commercial properties
increases the demand in the market. With the help of this analyzes below, citizens of the UK
can better understand the property market's supply and demand trends.
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Figure 1 Demand Curve, 2019.
The following diagram illustrates the demand curve that slopes downward. Obviously, as
the product price grows through p3 to p2 the demand quantity by customers decreases from Q3
to Q2 and instead Q3 and vice versa. Similarly, when price of commercial properties are
increases then demand automatically decreases due to high prices which buyers can’t afford.
Relationship of price and quantity force the demand curve to be downward direction due to
inverse relationship.
Law of supply: Supply law says that certain variables that remain unchanged that is price
and supplied quantity of a good which are closely related to one another. In other words, as
consumers pay the price for a good increasing, manufacturers can then raise the availability of
that product on the market (Law of Supply, 2020). Supply law describes the actions of the
manufacturer at the moment of shifts in products and services prices. When the price of
products rises, the provider also increases the supply due to high prices which helps in generating
more profit. In case of commercial properties, both factors such as price and supplied quantity
has positive relationship which force the supply curve to moves in upward directions. Below
mention graph provide better understating:
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