Economics for Business: Supply and Demand Analysis and Government Policies in the UK Retail Sector

This report discusses the supply and demand analysis in the retail sector and explores the main factors influencing positive and negative shifts in consumer demand for retail goods and services. It also examines the main UK governmental and economic policies that can be used to influence consumer retail spending, including subsidies, taxes, poverty programs, and government intervention. The report provides insights into how these policies impact the retail industry and consumer behavior in the United Kingdom.

Economics for Business

EXECUTIVE SUMMARY
The supply and demand analysis, that includes the main factors that decided so both favorably
and adversely transition, was illustrated in this report. It is linked to the demand for retail goods
& services from consumers. With the assistance of this, institutions are capable of making their
growth or business plan applicable to intensified competition. Moreover, this section also
contains financial or government sets of data that are used to influence customer buying in the
United Kingdom.

Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
TASK 1............................................................................................................................................4
TASK 2............................................................................................................................................8
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Indeed, the implementation of the economic, operational, technical and political problems facing
firms is a domain of knowledge economics. Business economics covers topics such as the idea of
scarcity, commodity variables, development and sales (Nelson, 2020). Organisation and legal
with all the difficulties facing a manager sor a business. Consequently, the scale of the financial
system is broad. As a business can handle internal or institutional as well as foreign or
environmental issues, there are numerous economic principles that refer to it, such as
consumption and output analysis. This assessment covers several topics, including many factors
that have influenced the pro and con shift in retail goods & services, such as with the free market
report. In addition, it discusses the govt policy that is used to monitor the UK’s consumers in the
retail sector.
MAIN BODY
TASK 1
Using supply and demand analysis identify the main factors in determining the positive and
negative shifts linked to changes in consumer demand for retail goods and services.
The investment and distribution theory is a concept that describes the relationship between
purchasing and sale. The theory indicates the influence of the correlation here between price
point and the desire of individuals to spend or sell the product. Usually, as prices grow, people
are less capable of supplying more produce and, alternatively, as prices decline.
Law of Demand- It is one of economics' most relevant principles. The Law of Supply works to
clarify how goods are exchanged by economic economies and determine the commodity costs
they face in day-to-day operations. As per the law of production, the sums purchased vary
inversely according to the rise in volume. In other words, the higher the price of the product
forces consumers to consume a small amount (Teece, 2019). This is attributed to a drop in
overall worth.

Above - the demand curve shows that higher material prices for retail goods & services would
automatically discourage consumers from purchasing and decrease the anticipated quality. If
there is an inverse association between market theory, price and demanded output, and the reason
for moving the consumer surplus to a correct or incorrect step.
Shift in Demand Curve- A transition in the equilibrium price happens as the entire demand
curve moves to the right side and sometimes to the left side. For example, an increase in wages
could mean that buyers may want to buy more commodities at the same cost. For this reason, the
share price will take a positive turn mostly on right side of the page.
Multiple factors that influence market demand for commercial goods & services have been
evaluated, as per the previous one in this thread-mentioned graph. As taste shifts to greater
popularity, house prices escalate, consumption increases, alternative services and solutions rates

also grow, commodities prices are expected to rise in the forecast, etc., and the market price
takes a positive turn. These variables will increase market appetite for retail products & services,
as described in the graph, pushing the customer surplus from D0 to D1 to shift favourably
(Gupta, 2019). Above will-mentioned factor, on the other hand, decreases competitiveness due to
a decrease in customer taste, substitution costs, mass starvation, etc.
Law of supply- This is a micro-economic law which states that the quantity of goods
manufactured by producers will improve as the price of the goods or product increases, where all
requirements are equal, and vice versa. The supply rule notes that by increasing the amount
available to buy as the cost of an item rises, manufacturers will try to optimise their profits. The
graph following gives a better description of how the supply curves is determined by the price
and quality of the product.
The supply chart above indicates a favourable association between the price of the product and
the competitiveness of the manufacturers. As market price changes discrepancies & facilities
from P1 to P2, based on the standard from Q1 to Q2 also exists. There are several variables that
optimise the profit and quality of supply.
Shift in Supply Curve- Price-excluded variables have a major influence on the amount supplied.
These factors cause the quantity given to change. For instance, this move is sometimes divided

into two movements, the left and the right. Understand that while the demand is constant, this
change actually occurs as the influence of other influences on production is measured (Vu,
Hoang and Nguyen, 2019). A shift in the index finger means that the curve has a positive
influence, while a shift in the index finger shows that the supply slope has a detrimental impact.
The variables can be directly proportional, either directly or unequally, to the amount of products
delivered. A greater underestimate of the assess market change is given in the graph below.
When several factors affect and can cause positive and negative changes, there is a transition in
the supply curve. Increased conditions of exogenous hormones, lowered prices of inputs, modern
technology, low taxes, and etc. lead to a beneficial transition. In the other hand, weak
environmental conditions, heavy taxes, technical declines, etc. affect the market level and cause
significant decline. Increase in the transfer of the overall supply from S0 to S1, which is referred
to as the transfer of the right hand side and falls in the shift in the demand curve, also referred to
as the layside wave.
Factors impacting consumer retail demand- With regard to products & services, there are
many factors impacting the customer's business demand. Any of them are listed above:
UK population- It is one of the key factors shaping retail goods & services industry demand.
The reason behind short supply is the greater output and the lower output induced by limited
density. In the context of consumer competition for retail items & facilities, as the proportion of
young individual’s increases, competition for comparable commodities such as clothes, gadgets,
convenient packaged foods, etc. also increases. In the other hand, as the British economy has

older adults, the appeal of youth-based fast food commodities and other grocery products
decrease faster than output.
Income effect and shift in employment- A rise in disposable income or a shift in employment
that encourages consumers to consume more goods. A variety of factors might lead to higher
wages, such as wage increases and lower taxes (Buckle and Thompson, 2020). The required
quality often continues to improve as individual income rises, but as disposable income
decreases, on the other hand, competitiveness for retail goods & services also decreases.
Subsidies: The growth in the price of substitutes, and the shift in the prices of retail goods and
services, would lead to an increase in competition for the next demand for its products. When the
government reduces the price of benefits because it has a strong association, it then lowers the
price of a good. In the other side, as government subsidies are increased, demand for particular
goods is also growing.
Substitute goods: This pattern also affects the economic development of retail goods & services.
If the value of the substitute item increases, inflation for original items increases, and if the value
of the substitute material falls, there is often a reduction in spending for current goods. The
positive relationship that impacts existing market for luxury goods is illustrated in this situation.
UK regional or local demand: over the projected timeframe, production for the general sector
and retail goods & services will also be impacted by the local and UK economy. Growing the use
of local goods often raises demand for consumer products or services. When, in this situation,
local demand for retail goods drops, the price often decreases, results in a lack of market
demand.
TASK 2
Identify and explain the main UK governmental and economic policies that could be used to
influence consumer retail spending in the United Kingdom
The European Union uses monetary policies such as inflation, interest rates, and capital spending
to improve the economy in the right direction by rising or global decline and the provision of
goods and services. Economic plans will increase production, stimulate jobs, and pave the way
for long-term economic development. For retailers, monetary policy affects customer demand,
market costs, capital planning and ability to thrive. There are many major UK government
programmes that help to recover the nation from the loss of aggregate salesperson. Some of them
listed above are stated above:

Subsidies & taxes- Subsidization and taxes have an effect on competition by altering the value
of such businesses and thereby affecting their output decisions. This could have beneficial
consequences, such as the use of grants to extend financial assistance to fast-growing smaller
companies, and taxation could be used to mitigate environmental impact (Kaya, Erkut and
Thierbach, 2019). However, incentives and fees can also build barriers to business entry,
encouraging firms to expand and tap into market supremacy. Government leaders should be
aware both of the degree of rivalry in the environment and of the ways in which various policies
can influence rivalry in order to mitigate the negative influences of the production of incentives
on rivalry.
Government as suppliers: In some sectors, the state also plays a major part as a manufacturer.
The policy could opt to act as a provider of products or services according to legal and moral
principles. The NHS in the United Kingdom, for example, guarantees that all people provide
health care benefits. In certain cases, the actual use of the state's capital for social ,
environmental or protection reasons may be used for the selling of products and services to
customers. For example, the Land Registry gathers inventory including such current homes and
delivers all of this information to buyers and intermediaries. As a result of the financial downturn
in recent years, the government too has taken further charge of some undertakings, especially the
UK banking.
Retail subsidies: In order to recover their economies from catastrophes or losses, the UK
government provides several types of benefits to the retail industry. Because of COVID-19,
every corporation is affected and the nation is experiencing immense casualties, so the United
Kingdom provides small enterprises with support to rebuild and ensure that past positions are
gained as quickly as practicable (Yu, Zeng, and Zhang, 2019). In order to improve economic
performance, the government maximises its expenditure portion, minimises taxes and bond
yields for consumer goods & services. These fiscal procedures allow other individuals rebound
from their losses and actually inspire them to run their business again in order to earn profit and
to expand sustainably.
Poverty programmes: In order to assist the industry can benefit from the absence of disposable
customer purchases, economic policies of this sort are set out (Government Policy, 2020). The
British government has implemented many development initiatives and programmes, such as

HBAI (families below marginal earnings), crime rates, etc. This would make a dramatic impact
and help kids fight injustice not only with the fellow humans, but also with the well-being of
their families, economies and community as whole and. In the United Kingdom, they are
passionate about resolving child poverty by 2020. On 5 April 2011, they released the European
Union's first youth development poverty programme, setting out all the measures they will take
to reach our goals between 2011 and 2014. The 2nd National Action Plan on the elimination of
healthcare expenses in the European Union was issued on 26 June 2014, with an emphasis on the
draught order and for the years 2014 and 2017 respectively. In the United Kingdom, the
administration is releasing a tax differential research studies HBAI (families below average
salaries). This study puts national poverty at 60% of the United Kingdom’s minimum yearly
salary. If income is even smaller than about 60% of the average, HBAI appears to be living in
severe poverty. That's basically the concept of absolute poverty, because true poverty is just
when the homeowner’s income is less than 60 percent of what was generally observed in 2011.
One in five (22 per cent) families in the United Kingdom had a huge impact on earnings, taking
account their house prices. 30 percent of children live in lower income families (the importance
of housing). It's about twice the median wage (16 percent) for people on welfare.
Government as an influencer: The UK government is deliberately trying to track customer
conduct and firm intervention directly (Government as an influence, 2020). In order to allow
self-regulation, maybe it was a great way to protect study consists, but it is worth being aware of
the goal of strengthening unequal cooperation in competition. Behavioural finance suggests that
people's action plays a key role in deciding the level of competitiveness in many economies.
Public and regulatory authorities will play a vital role in ensuring that customers compete
effectively in markets by, for particular, supplying accurate information or transferring providers
efficiently. Control may rely on demand by attempting to manipulate consumer behaviour in a
number of ways, whether by legislation or the tax code. In the case of alcohol, products are more
heavily regulated than other items, and customers under the age of sixteen are excluded from
sales. The European commission will also use marketing strategies and voluntary programmes to
illustrate the cost of this behaviour. This indicates that the government can play a significant role
in making firms work well through customer curiosity and business involvement.

Both of the above-mentioned UK policy decisions allow the economy to grow from commodity
decreases in retail products & services. These economic policies suggest that firms prosper from
their activities, which undoubtedly help to rebuild the economy.
CONCLUSION
On the context of the above-mentioned discussion, it was concluded that economics and their
fundamental pillar are necessary to evaluate the dynamics of industry and the prices for goods
from firms. Strategic members, with the help of consumption and production data, will evaluate
their decisions and change their action plans. In particular, they should also guarantee that the
entity maximises its advantage by examining the market structure and integrating such a concept
into their organisations. The company and its activities are affected by many factors that further
cause both growth and profitability. Rise in the workforce, family incomes, subsidies, substitute
products, etc. There are also several economic initiatives to impact the UK government’s retail
buying of consumers.

REFERENCES
Nelson, J.A., 2020. Economics for (and by) humans. Review of Social Economy, pp.1-14.
Teece, D.J., 2019. A capability theory of the firm: an economics and (strategic) management
perspective. New Zealand Economic Papers, 53(1), pp.1-43.
Gupta, S.C., 2019. Business statistics. Himalaya.
Vu, T.H., Tran, T., Hoang, P.H. and Nguyen, M.H., 2019. Economics: The trend-setting
field. The Vietnamese Social Sciences at a Fork in the Road, pp.80-97.
Buckle, M. and Thompson, J., 2020. The UK financial system: Theory and Practice. Manchester
University Press.
Kaya, T., Erkut, B. and Thierbach, N., 2019. Entrepreneurial intentions of business and
economics students in Germany and Cyprus: A cross-cultural
comparison. Sustainability, 11(5), p.1437.
Yu, L., Zeng, S., Merigó, J.M. and Zhang, C., 2019. A new distance measure based on the
weighted induced method and its application to Pythagorean fuzzy multiple attribute
group decision making. International Journal of Intelligent Systems, 34(7), pp.1440-
1454.
Online
Government policy. 2020. [Online]. Available Through:
https://www.gov.uk/government/publications/2010-to-2015-government-policy-poverty-
and-social-justice/2010-to-2015-government-policy-poverty-and-social-justice
Government as influencer. 2020. [Online]. Available Through:
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/
attachment_data/file/284451/OFT1113.pdf