Economics for Business - British Cheddar Cheese

Added on - 17 Feb 2021

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Economics for Business
Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................1Presenting demand and supply analysis......................................................................................1Presenting Supply and demand curve theory..............................................................................5Presenting the theoretical factors that shift supply and demand curves......................................7Presenting how demand and supply applied to the price of British Cheddar Cheese.................9CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11
INTRODUCTIONDemand and supply have their own importance in the economics of a business and itrefers to the quantity of the products as well as services which is actually desired by the buyers.On the other side supply represent how much market is actually offer. The report main aim is toprovide deep knowledge related to supply and demand management system. Report describe themeaning as well as importance of demand and supply curve and explain the theoretical factorsthat shift the supply and demand curves. The theory further applied to the price of BritishCheddar Cheese in UK which is a hard, off white natural cheese. It is world famous type ofcheese in UK.MAIN BODYPresenting demand and supply analysisSupply and demand are the most fundamental concepts of economics and it is alsoconsider the backbone of a market economy. In this, demand refers to how much quantity of aproducts and services are desired by the buyers (Li and et.al., 2018). Moreover, the demand is anamount of a product which people are willing to buy for certain price and then the relationshipbetween price and quantity is demanded and this is known as demand relationship.Supply refers to how much the market can offer in order to fulfil the demand of theircustomers. Even the correlation between price and how much goods or services are supplied to amarket that is actually known as supply relationship. The relationship between the demand andsupply be the forces which are behind the allocation of resources. There are so many theories,demand and supply theory which are as mentioned below:Law of Demand:This states that if the other factors that affect the demand and supplyremains equal then the prices of goods are higher and the people demand for the good becomelesser. On the other side, as the prices are higher then the demand of their products become lower(Zhou and et.al., 2018). As the amount of goods are higher then it directly affect the consumptionpower of the buyers. As a result, customers or people will naturally avoid to buy a products andit will further force them to forgo the consumption of goods.1
Interpretation:In the given fig, A,B,C are three points of demand curve and each pointof the curve reflect the direct correlation with a quantity as well as price, i.e. Q and P. the graphline shows that as the price of the goods become higher then it will directly lower down theconsumption of the buyer and as a result it will directly affect the economy of the system.Law of supply:It is also similar to the law of demand but the supply relationship showsthe upward slope which means that if the price if the products are higher then the supply of theproducts are also higher (Mokyr, 2018). In addition to this, if the producer supply more at higherprice due to selling a higher quantity and it will help to raise the revenue and as a result, theeconomy of the country affected in positive way.2Illustration1: Law of demand(Source: Law of demand, 2018)
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