Law of Demand and Supply in UK Food Market

ECONOMICS FOR
BUSINESS

EXECUTIVE SUMMARY
This report shows the law of demand and law of supply of food in UK market. Movement
along with supply curve and demand curve of the food supply. Shift in supply curve and demand
by rightwards and leftward supply and demand of food. Equilibrium level with change in price
and quantity and also concept of shortage and surplus in supply and demand. Lastly, UK
government economic policies that affect the during Covid-19 and unable to meet the
requirements.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Task1................................................................................................................................................4
Law of demand and law of Supply..............................................................................................4
Movement in supply curve...........................................................................................................4
Shift in supply curve....................................................................................................................5
Movement in demand in food......................................................................................................7
Shift in demand of food...............................................................................................................8
Equilibrium price and quantity..................................................................................................10
Task 2.............................................................................................................................................12
CONCLUSION..............................................................................................................................14
REFERENCES................................................................................................................................1

INTRODUCTION
Demand and supply is the fundamental concept of economics. Demand refer to
interaction between the seller of goods and buyer for that goods. It defines the relationship
between the price of the product and willingness of people to buy that product. Supply refers to
selling of goods by the seller at a time of higher price in market where demand is low and
consumers are willing to purchase less. The demand and supply of UK supply chain is very
dynamic due to their unstable in economic balance (Clapp, and Moseley, 2020).
The demand of supply of UK food chain and how they affected with the prices and other
factors that shift or move demand and supply curve. Equilibrium point of price and quantity and
how equilibrium shift demand and supply curve of the same. Whereas, economic principles are
also stated and their intervention in demand and supply of food related goods with examples are
explained.
MAIN BODY
Task1
Law of demand and law of Supply
Law of supply states that all other factor remains constant, higher the price of goods leads
to higher supply in the market. It means increase in price leads to increase in supply of food in
market by the supplier. To earn more of profit, supplier increased their supplies in market at a
time of high price. But It results in decrease in demand of goods in market. Whereas, at this point
supply of food chain is very high in market.
Law of demand state that, all other factor remains constant, higher the price of good
leads to decrease in demand of that good. It means higher the price of product lower the quantity
demanded. It shows the direct relations between the demand of product and its price of product.
Demand of product will change if price of product changed. The UK food supply has been very
dynamic and changed very frequently. Consumers decrease their demand for foods products that
can not necessary and can be consumed later (Kim, Kim, and Park, 2020). Only those goods will
be consumed that are necessary like rice and wheat, fruits and vegetables. The fluctuation of
price of food products will directly affect its demand and supply in market.
Movement in supply curve.
There is a positive relation between price and supply of goods by the supplier. The
upward movement shows the increase in price result in increase in supply of goods in market. It