UK Food Supply Challenges in 2020

1

EXECUTIVE SUMMARY
This project provides information on the UK food supply challenges in 2020. In this
report presented the business economics, description and use of economic theory of Demand and
Supply. The explanation of the law of the demand and supply is made through the representation
of graphs. The representation shows the shifts in the demand and supply curve along with the
equilibrium price and quantity with examples. Further the explanation of the shortage and
surplus food supply is provided. What are its effects in the market? Also outlined failures of
market of the United Kingdom and the interventions made by the UK government to cope-up
with the failures. Different government strategies viz. Quotas, Taxation, Fiscal Policy, and social
welfare strategies is mentioned, and the details are explained. In the end a statement of an
argument is provided how the UK government effectively addressed food supply market failures
in 2020 and what are the measures that can be taken to further improve the policies. The
conclusion is made on the findings of the analysis of the UK markets and the application of the
law of the demand and supply on the food supply during the crisis of COVID-19 in 2020.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
TASK 1.......................................................................................................................................4
Law of Supply and Demand and its application to UK food supply.........................................4
1.a Movements in Supply Curve.................................................................................................4
1.b Equilibrium in demand and supply Curve............................................................................8
TASK 2.....................................................................................................................................11
Market Failures and interventions of the United Kingdom Government in 2020...................11
2.a Government Strategies........................................................................................................12
2.b Argument............................................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15
3

INTRODUCTION
Economics is a study related to the behaviour of the human being how it relates to the
production and consumption of the goods and services. It is divided into two parts viz.
Microeconomics that relates to the human being and their businesses. Other is Macroeconomics
that relates to the whole nation's economies. Business economics studies the various factors that
relates to the business and the behaviour of the parties related to the business environment
(Krugman and et.al, 2019). In this report macroeconomic factors which is the supply and
demand, that affected the United Kingdom’s food supply has been analysed and its impacts over
the country is presented. Further in the study highlighted the impact of COVID-19 and the
interventions of the UK government to address the issue of food supply in the country. Facts and
examples of the government interventions from the news and publications is being added to
support the study.
MAIN BODY
TASK 1
Law of Supply and Demand and its application to UK food supply.
The principles of the Demand and Supply shows the interrelationship of the supply of the
product and services with that of demand. It shows how much the buyers of the product/service
have the willingness to pay and supply of the Product/services in the market. The principles
stated the general relationship that when the demand increases, and the supply is low the price of
the products or services increases and vice-versa when supply increases and the demand
decreases (Krugman and et.al, 2019). In the context of the UK food supply during the pandemic
of COVID-19 people tend to increase in stockpiling goods which in result cause the scarcity of
the goods in the UK markets. The COVID-19 outbreak hindered the food supply which the
retailers are not able to cope-up due to agile and insufficient supply systems.
1.a Movements in Supply Curve
A supply curve is a representation of the movement in price and the quantity supplied in
the market. It stated that with increase in the price of the product or services in the market the
supply is also increase and because of the interrelationship the supply curve always slopes
upward (Krugman and et,al, 2017).