Economics for Business: Impact of COVID-19 on Demand and Supply in the UK Food Sector

This report discusses the impact of COVID-19 on the demand and supply of the UK food sector. It explores the movement of supply and demand curves, the equilibrium of price and quantity, and the issues faced by the government. Strategies and policies implemented to overcome these challenges are also discussed.

Economics for Business

EXECUTIVE SUMMERY
Economic is consider as subject which help in provides knowledge regarding with the
consumption, demand and supply of goods how principle use for running money cycle within
the economy. There will be many factors which impact of demand & Supply in many ways. To
understand the use of theories and principle of economic in order to measure impact of COVID-
19 pandemic, this report is formulated. It is divided into 2 parts. Part 1 is related with how
demand and supply curve sifts right or left due to affect of price or other factors as well as
impact of pandemic on calculating of equilibrium point. In other part, strategies formulate for
the purpose of overcome this problem is define is systematic manner.

Table of Contents
EXECUTIVE SUMMERY .............................................................................................................2
INTRODUCTION ..........................................................................................................................4
TASK 1 ...........................................................................................................................................4
Explanation regarding movement in supply curve. ..................................................................4
Movements of demand curve. .....................................................................................................6
Explanation of equilibrium of price & quantity. ........................................................................7
Explanation regarding with shortage & surplus in food sector. ..................................................8
TASK 2 ...........................................................................................................................................8
Brief explanation regarding issue and problems UK government face within food sector of the
country and strategies or policies they use to overcome theses problems...................................8
CONCLISION ..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Business economies consider as branch of economy which is developed for implement
theories of economics in practical business life. This report is formulated foe define how
theories and principle of economic useful in evaluate important of demand ad supply over the
economy of UK. For this purpose food sector of UK has been select. This report includes how
COVID- 19 directly positively or adversely become the reason of shifting of demand & supply
curve. It also includes the policies and strategies government of UK implemented for the purpose
of overcome loss arise due to Corona virus pandemic.
TASK 1
Explanation regarding movement in supply curve.
Supply: The term supply define as monetary value of products or service available to
customers. It is consider as essential element to run an economy as on the basis of supplying
require products , government able to fulfil needs and demand of public. As per the theory
developed by Krugman & Wells , their will be many factors which are the reason of shifting in
supply curve. Mainly price of products impact on changes in the shifts of curve. In order to
understand its relation law of supply principle is use, which are define below:
Situation when supply curve shift to right:
Impact of price: According to the principle which states in the books of Krugman & Wells ,
when the price of products has been increase then the supply curve eventfully shifts from left to
right (Easton, 2020).

When supply curve shift to left: Supply curve changes its position or shifty towards
left at the time when the price of products are fall then the rate of supply & production is also
decrease which directly impact on the supply curve. Thus it shifts from s1 to s2 when the price of
product shifts then quantity of supply also changes from q1 to q2 which directly impacted on the
shifting of supply curve (Gaspar, 2020).

Supply curve related with UK food sector:
Impact of availability of goods: UK already face problems to run their economy effectively,and
COVID – 19 pandemic adversely impact on the cycle of economy of this country This pandemic
would be adversely impact on the food supply market of the country.
UK already face issuer related with shortage of season workers and due to lock-down
period and strict guild-line formulated by government the rate of shortages of availability of
workers for production purpose is decline as well as shortage of importing fruits and vegetable
also decline (Holden, 2020).
UK import 85 % of fresh fruits and vegetables from European countries but due to the
pandemic and rigid transportation policy they are not able to import fruits in 2020 which will
adversely effect availability of supply of products within market. It is also consider as biggest
reason of shifting of supply curve from right to left.
Movements of demand curve.
Demand: The term demand define as desire or willingness of consumers to purchase
specific product or services service and have ability to pay price for a particular goods or
service. In order to understand shifting in demand curve, law of demand help in interpreting
effect of demand.
Shift to left:
Impact of preferences: Demand curve change its position from right to left when price of
product is high then demand of goods & services automatically reduce which impact on its
demand curve. On the other side it move towards left even when price of products remain

constant however other factors like, preferences, taste, essential requirement of goods, are
decreases then the demand of goods or services which consumer wants to consume are
decreases.
Shift to right: Demand curve of food sector of UK affect from many of factors as the
area is wider thus it impact with elements or factors like policies, regulation, preferences of
customers, ability to pay. Demand curve shifts from left to right when price of products decline
then customer demand for purchasing particular food products increases which directly impact
on shifting of curve.

Demand curve of UK sector:
Impact of taxation policies: Besides exchanges in prices, demand curve also affects and change
position with other factors of demand also. It includes, preferences, income level, essential
requirement of products, government regulations.
UK is one of the most famous travailing destination for tourist. More then of 60 % of
revenue of restaurants is generate due to tourist. Thus due to restriction of travailing and
transport, restaurant revenue rate decline as it directly effect on the demand of fisheries, meat or
other food items. As well as demand of luxurious product , decline and groceries, reduce. Which
become the reason of shifting of demand of curve of these products (Howlett, 2020).

However demand of health care item, medical products has bee increase which consider only
resource of revenue during the time of pandemic.
Explanation of equilibrium of price & quantity.
Equilibrium is consider as only one point at which customers and suppliers perception
regarding price of products is match. It is the point at which demand and supply of particular
product or pricer is match. Value of products are decided on the basis of evaluating and
recognizing this point, and government formulate strategies on the basis of analysing equilibrium
point. Market equilibrium of prices are set where price of market assets on the basis of
perception and demand of consumers and , value of goods re evaluate on the basis of analysis
and evaluating value of each segment of market of customers as well as supervention and
requirement of supplier. Prices are difference in market.
It totally depend in the market from which products are belong. Prices of perfect,
monopoly, oligopoly is different and their point of equilibrium is also different. COVID- 19
directly impact towards the supply curve of market economy thus point of equilibrium is match
when the price of food sector is equal to their supply of products and items of food sector.
Equilibrium of quantity define as a point where demand of quantity is equal to the supply of
process of equilibrium.
Explanation regarding with shortage & surplus in food sector.
Shortage and surplus are consider as essential element of economy. Theses are the
reason of changes arises within the demand & supply curve. Shortage is consider as the amount
at which demand of quantitative products is more then the prices of quantitative supply. In other
words when demand of goods is higher then the availability of supply of particular products.
On the other side surplus is a condition of excess of supply of particular product or
services as compare to demand of these products. Due to the impact of COVID -19 government
face shortage is many products which includes, essential groceries products, fruits, vegetables,
luxurious goods, shortage of cars or sports equipment. However the supply of mask, health care
products, medical equipment, has been raise (Krugman,2020).

TASK 2
Brief explanation regarding issue and problems UK government face within food sector of the
country and strategies or policies they use to overcome theses problems.
COVID- 19 pandemic is negatively impact towards the whole economy of UK. It totally
ruin the food market chan of UK. Which will directly impact on their supply of items of food
sector. As well as hospitality sector business which related with the distributions of food items.
Following are the market failure which UK face due to this pandemic issue:
Government face shortage of labour due to the Brixit agreement and this pandemic
increase the rate of labour turnover, due to shortage of labour and workers organization not able
to manufacture food products and provides services thus organizations. Labour shortage reduce
their availability of provides essential food items which negativity impact on the economy cycle
of this country.
Due to this the rate of production cost has been increases as organization need to focus
on safety measurement thus they need to buy health safety toolkit.
Many of restaurants, hotels, or food manufacturing organizations close their outlay due the
negative impact of this pandemic as they are not able to cover up their maintain cost of running
food organizations. Due to this , Baxter Food group close their organization in UK a well as
dairy giant Müller and other food sector organization face heavy looses.
Taste, preference and demand of consumers get totally changes with the impact of Corona
virus.
As marking strategies and future plan of organizations change, they need to convert
ether polices. Food sector which belongs from run business in supplely meat is clearly
exploited due to the fear of infection of this virus. Thus many of people lost their jobs, the rate of
unemployment has been increases and labour turn over rate is enhanced due to shortage
availability of resource and monetary capital.
The whole structure and monetary cycle of UK decline, demand of food sector impact
and preference of customers are change and now that are willing to chose only healthy
prodf8ixcts which boost their immunity. Thus organization need to formulate policies which
includes and focus on safety measurement of employee.

Even though COVID - 19 adversely impact on the whole food sector of UK however
their government formulate policies and implement strategies in order to control their impact of
this pandemic (Suh and Shim, 2020).
Price control: This is consider as one of the most useful strategy or policy British
government implemented for the purpose of providing relief to public of UK. Price control, is
policy in which government restrict to increase the price of some specific products. In order to
control the rate of inflation within the economy. However they face many problem. At present
time government of UK, control price of fruits, vegetables, mineral food items item related to
health care.
They also set price of transportation of import of export of these products as well as
control their price of times grains. They control price of bred,, milk as all these are essential
food item people not able to manage pay high amount of these items due to shortage of supply
as well as non ability of cash capital.
Taxation: It is consider as the tools or element which useful in managing cash outflow
of economy. Before this pandemic due to the impact of Brixit, government of UK took high rate
of taxes on import or export of goods, and duties.
However after this pandemic they change their tax structure and reduce tax rate on
essential food products and elements as well as they also decile rate of tax related with restaurant
and hotels which provides recommendation facilities. However they impose high rate of tax on
those food items through which they can generate revenue and decrease their money cycle on
the basis of that they can maintain money flow of the basis of that they can able to run their food
business. Due to the impact of this problem in order to enhance and establishes new start up,
British government focus on control and provides tax relief to newly start up organizations,
specially those entities which open their business in food sector, in order to enhance growth rate
of this sector. Thy also run new policies win which they provide relief to those tax pay er who
are not able to fulfill their tax liability as well as give concession regarding with tax liability in
case of food sector.
They also formulate policies and strategies to provide financial assistance to those who
run business in the sector of providing services. Government of UK impose high tax on luxurious
beverage item, beer, cold drinks as these are beneficial for the purpose of increasing inflow of
cash and fulfil lack of ability of money in economy.

Fiscal policies: Theses policies are consider as essential part of government policies.
Fiscal policy is implemented for the purpose of control expenditure ad cash outflow within the
market by using strict rules related with taxation. Government of UK in their 2020's fiscal policy
implement new strategies and proved relief regarding with strict rules related with the business.
In order to maintain position of food market of UK they formulate policies to spread their food
market for this purpose they avoid to change start or customer duties as well and change
imposed on delivering of their food products (Wiktor, 2019).
Poverty program: In UK more then of 14 million people live their lifer below the line of
standard living. Which impacts that more then of one third of total population of UK becomes
under this category. Due to COVID-19 many of people lost their jobs thus the number of
people sped their life n below the standard number of living has been increase. Government of
UK already run their education poverty ads well as child safety and development program in
which they provides facility to poor children for education. However they contribute towards the
poverty fund especially to overcome the issue related with COVID of and help personas in order
to overcome their problem related with poverty.
CONCLISION
From the above analysis it has been concluded that COVID – 19 pandemic is directly
affect the entire world 's economy. In case of UK , government of this country also face issue ,
as their curve of demand and supply shifts from positions of food items which directly impacted
on the equilibrium point.
Thus government face problem related will setting price of each food products as well as
de to shortage of availability and non ability of supply of material or grains their food sector
suffers from high rate of inflation. Cost of manufacturing of food items is increase and m which
become the reason of shutting down of many big food corporations. However by using effective
fiscal, taxation and price control policy they able to control loss as well as by setting up of new
start up, government try to overcome loss arises due to COVID- 19 pandemic.

REFERENCES
Books and journals
Easton, K., 2020. Alone, Together: Redefining Connectedness in the Age of COVID. Journal of
social work in end-of-life & palliative care, pp.1-3.
Gaspar, J. M., 2020. Paul Krugman: contributions to Geography and Trade. Letters in Spatial
and Resource Sciences, 13(1). pp.99-115.
Holden, A., Responding to the Coronavirus crisis. Parallels for tourism and climate
change?. Languages, Literatures and Cultures of the University of Bergamo where she
is member of the CST-DiathesisLab. Her primary research interests are participatory
processes and collaborative mapping to promote territorial regeneration in a
sustainable perspective. p.73.
Howlett, J., 2020. The Governance of British Higher Education: The Impact of Governmental,
Financial and Market Pressures: By Michael Shattock and Aniko Horvath. Pp198+ xxiii.
London: Bloomsbury Academic. 2020.£ 81 (hbk). ISBN 978-1350074026 (hbk). British
Journal of Educational Studies. pp.1-3.
Krugman, P., Wells, R., Volkswirtschaftslehre-Mankiw, N.G., Makroökonomik-Mankiw, N. G.
and Taylor, M. P., Verbindung zu anderen Modulen. MODULHANDBUCH SPO2016.
p.24.
Suh, J. B. and Shim, H. S., 2020. The effect of ethical corporate culture on anti-fraud strategies
in South Korean financial companies: Mediation of whistleblowing and a sectoral
comparison approach in depository institutions. International Journal of Law, Crime
and Justice.60.p.100361.
Wiktor, J. W., 2019. Michael E. Porter's Concept of Competition in the Context of the EU
Internal Market Protection System. Przegląd Organizacji.(6). pp.9-16.

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