Economics for Business

This article discusses the supply and demand analysis in the context of retail goods and services. It explores the factors that determine positive and negative shifts in consumer demand. Additionally, it examines the UK government and economic policies that influence consumer retail spending.

Economics for Business

EXECUTIVE SUMMARY
The supply and demand study, which involves the key factors that determined both the positively
and negatively change, was outlined in this article. It is related to the demand for retail products
& services from customers. Institutions are capable of making their development or corporate
strategy relevant to increased competition with the aid of this. In addition, this article also
includes economic or public data sets that are used to affect UK consumer purchasing.

Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
TASK 1............................................................................................................................................4
TASK 2............................................................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Indeed, market economics is a field of information economics is the application the economic,
administrative, economic, and environmental issues facing businesses (Mulhearn and Vane,
2020). Company economics includes subjects like the principle of scarcity, factors of goods,
distribution and marketing. Companies contend with all of the challenges a leader or a company
faces. Consequently, the national economy scope is wide. While a company should resolve
internal or organisational as well as international or environmental problems, there are different
economic concepts, like consumption and production analysis, that apply to it. This evaluation
includes many subjects, such as the study of supply side, including several variables that have
determined the pro and con change in retail products & services. In addition, it addresses the
government strategy that is used in the retail market to control the UK’s customers.
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.
A definition that defines the interaction between buying and selling is the theory of production
and consumption. The model emphasizes the consequence of the relationship between the price
level and the willingness of people to spend or sell the material. Typically, as prices increase,
individuals are less able to supply any more output and conversely as prices fall.
Law of Demand-It is one of the most important concepts of economics. The Rule of Supply
works to explain how economic societies share resources and assess the consumer prices they
face in day-to-day activities (Simon, 2019). The amounts purchased differ inversely as per the
increase in value, as per the law of demand. The higher the price of the commodity, in other
terms, forces buyers to buy a small volume. This is because of a decline in total value.

The above demand curve indicates that greater retail products & services commodity costs will
deter buyers from buying and lower the quality expected automatically. If the theory of demand,
price and requested quality have an inverse correlation and are the explanation for shifting the
demand curve to a positively or negatively move.
Shift in Demand Curve: When the whole demand curve travels to the correct and also the left
side, a shift in the demand curve occurs. An increase in incomes, for instance, may mean that
consumers could opt to purchase more goods at the very same rate. The market price, for this
purpose, would take a bullish turn on the right hand side.
As per the earlier in this thread-mentioned graph, multiple factors influencing market demand for
retail products & services have been analysed. The demand curve takes an optimistic turn as taste
changes to greater prominence, house price expands, demand rises, alternative products &

services costs also increase, goods prices are projected to rise in the future, etc. As stated in the
graph, these factors would raise market demand for retail goods & services, pushing the
consumer surplus to change positively from D0 to D1. On the other hand, the above-mentioned
element reduces competition due to a decline in consumer taste, replacement price, depopulation,
etc.
Law of supply: This is a micro-economic rule that specifies that, as the price of the commodity
or product increases, if all conditions are equivalent, the amount of products produced by
manufacturers will rise and conversely (LESTARI, WIDYASTUTI, BRABO, 2020). The rule of
supply says that producers can attempt to maximise their sales by expanding the volume offered
for purchase as the cost of an item grows. The graph below offers a clearer explanation of how
the price and consistency of the commodity impact the supply curve.
The above supply chart illustrates positive relationship between the price of the commodity and
the efficiency of the suppliers. As retail price increases gaps & facilities from P1 to P2 then
quality supply also incurs from Q1 to Q2. There are many factors that cause the value and the
efficiency of supply to be maximised.
Shift in Supply Curve: Price-excluded factors have a significant effect on the quantity supplied.
Such variables allow the quantity supplied to shift. This move, for example, is frequently broken
into two moves, the left and the right. Recognize that this transition takes place when the market

is constant as the effect of other factors on production is evaluated. A change in the right hand
means a positive impact on the curve, whereas a change in the index finger suggests a negative
effect on the supply slope (Teece, 2019). The factors may be proportionate to the number of the
goods provided, either explicitly or unequally. The graph below gives a stronger understatement
of the quantity supplied shift.
When many variables influence and may induce optimistic as well as detrimental shift, change in
supply curve occurs. Increased exogenous hormones conditions, reduced input costs, advanced
infrastructure, low taxes, etc. add to a favourable change. In the other hand, the price level and
force negative change are influenced by bad natural environments, high taxation, technology
decreases, etc. Increase in the change of the aggregate supply from S0 to S1that is called the shift
of the right side and decreases in the shift of the supply curve often called layside movement.
Factors impacting consumer retail demand: There are several variables influencing the market
demand of the customer with respect to goods & services. Above, some of them mentioned:
UK population: It is one of the major variables affecting market demand for retail goods &
services. The explanation beyond short supply is the higher production and small density caused
lower output. As the number of younger people rises in the case of market demand for retail
products & services, competition for relative goods such as clothing, gadgets, fast food products,
etc. also rises. In the other side, as the UK economy has older adults, popularity of fast food
goods and other supermarket products based on young people declines faster than production.
Income effect and shift in employment: An increase in discretionary income or a change in
jobs that causes more goods to be purchased by clients. A number of reasons, such as increased

wages and lower taxation, could contribute to higher wages. When individual income increases,
the requested quality also tends to increase, but when discretionary income declines, the other
hand also reduces competition for retail products & services.
Subsidies: An increase in the price of alternatives, including a change in the cost of retail goods
and services, will cause an increase in the demand for the next market for items (Vu, Hoang and
Nguyen, 2019). If the government is cutting the price of incentives, since it has a good
association, so price of the good therefore declines. In the other hand, as discounts are raised by
the government, demand for specific commodity also increases.
Substitute goods: Economic growth for retail products & services is also influenced by this
trend. If the price of replacement product increases, competition for original products increases,
and otherwise, if the cost of the replacement commodity declines, demand for existing goods
also decreases. This scenario highlights the optimistic interaction that impacts market demand
for consumer items.
UK regional or local demand: The demand for the general industry and retail products &
services is also influenced by local and UK market over the forecast period. Increasing local
commodity consumption also enhances the demand for retail services and products. If local
demand for retail products declines in the event, it also lowers the price leading to a shortage of
consumer 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
In order to boost the economy in the correct direction by increasing or decreasing demand and
availability of goods and services, the European commission uses fiscal policy such as inflation,
interest rates and capital expenditure. Fiscal policies would boost productivity, generate
opportunities and pave the way for sustainable growth in the long run. For retailers, consumer
appetite, market expenses, capital planning and the willing to succeed are influenced by fiscal
policy. There are several big UK government initiatives that aid in restoring the country from the
lack of retail aggregate demand. Above, some of them mentioned:
Subsidies & taxes: Subsidization and taxation affect competition by changing the valuation of
some of their firms and thereby influencing their production decisions (Lamour and Lorentz,
2019). This could have positive effects, such as the use of incentives to expand financial aid to
smaller businesses with fast growth, and taxes could be used to reduce environmental harm.
Subventions and fees, however, may also create obstacles to business entry, enabling companies
to grow and tap into market supremacy. Political officials should remember both the degree of
competitiveness in the economy and the way in which different approaches will affect this
competition in order to minimise the negative impacts on rivalry while developing incentives.
Government as suppliers: The state also plays a big role as a retailer in certain industries. On
legal and moral standards, the government might opt to act as a supplier of goods and services.
For instance, in the United Kingdom, the NHS promises that all persons have health care
coverage. In some situations, the real value of the resources run by the state for social,
environmental or safety purposes may be used to sell consumers goods and services. The Land
Register, for instance, collects resources such as existing homes and provides clients and
middlemen with much of this information. In recent years, as a result of the economic crisis, the
government has also taken more control of certain businesses, particularly UK banks.
Retail subsidies: The UK government offers many forms of incentives to the retail sector in
order to revive its economies from disasters or losses (Anastasiou, Louri and Tsionas, 2019).
Because of COVID-19, every business is impacted and the country is tanking tremendous losses,
so the UK state gives small businesses with subsidies to rebound and ensure that former roles are
acquired as quickly as possible. Government maximises their budget component in order to boost

economic efficiency, minimises the taxation and interest rates on retail goods & services. This
fiscal plans help other people recover from their setbacks and actually motivate them to run their
company again in order to generate benefit and have sustainable growth.
Poverty programmes: Economic initiatives of this type are set in order to help the economy
rebound from the lack of customer discretionary sales (Government policy, 2020). Several
development measures and services have been introduced by the British government, like HBAI
(families below median earnings), poverty rates, etc. Helping children to tackle poverty would
make a huge difference not only to their fellow human-being, but also with the wellbeing of their
communities, societies and culture as a whole. They are adamant about tackling child hunger by
2020 in the UK. They published the first national plan on youth poverty in the European Union
on 5 April 2011, pointing forth all the steps they would take to meet our targets between 2011
and 2014. The 2nd national action plan for the Reduction of welfare spending in the United
Kingdom was published on 26 June 2014, after focusing on the draft order and for the periods of
2014 and 2017. In the United Kingdom, the government releases a survey called HBAI (families
below median earnings) on tax difference. This report places the national poverty at 60 percent
of the median average earnings in the United Kingdom. If revenue is even less of some 60% of
that average, HBAI proclaims that it is living in extreme poverty. That really is the definition of
extreme poverty, since actual poverty is only where the wealth of the household is less that 60%
of the normally observed as it was in 2011. One out of five (22 percent) families in the United
Kingdom, taking into consideration their house costs, had a big impact on the profitability. In
low income families (the value of accommodation), 30 per cent of the students live. For those on
welfare, it's almost double the median income (16 percent).
Government as an influencer: The government of the United Kingdom is actively seeking
indirectly to monitor consumer behaviour and firm interference (Government as influencer,
2020). It may have been a good way to avoid proper activity to enable self-regulation, but it is
important to be aware of the aim to strengthen unfair competition collaboration. Behavioural
economics suggests that the behaviour of individuals plays a critical role in determining in many
economies the extent of competition. Public and regulatory bodies may play an essential role in
ensuring that consumers will successfully compete in markets by, for example, providing
adequate information or being able to quickly move providers. By trying to influence customer
behaviour in a variety of ways, including by regulations or the tax code, regulation can focus on

demand. In the case of alcohol, goods are taxed more strongly than most things and consumers
under the age of eighteen years are exempt from purchase. In order to demonstrate the expense
of this conduct, the UK government can also use marketing campaigns and community services.
This suggests that, through the consumer curiosity and company participation, the government
will play a major role in helping businesses work better (Wagner-Tsukamoto, 2019).
Both UK government policies mentioned above allow the economy to rebound from product
declines in retail goods & services. These economic strategies mean that companies benefit from
their efforts, which continue to revive the economy naturally.
CONCLUSION
It has been inferred, on the background of the above-mentioned debate, that economists and its
essential pillar are important in order to determine industry dynamics and business demand for
goods. Organizational leaders are able to analyse their choices and adjust their action plans, with
the aid of demand and supply data. In particular, they can also guarantee that, by analysing the
business structure and incorporating such a principle in their organisations, the entity maximises
its benefit. There are multiple variables that impact the organisation and its practises that further
trigger both development and profitability. Population growth, family wages, subsidies,
replacement goods, etc. In addition, there are many economic measures to affect customer retail
purchasing by the UK government.

REFERENCES
Mulhearn, C. and Vane, H.R., 2020. Economics for business. Red Globe Press.
Simon, J.L., 2019. The economics of population growth. Princeton university press.
LESTARI, S.D., LEON, F.M., WIDYASTUTI, S., BRABO, N.A. and Putra, A.H.P.K., 2020.
Antecedents and Consequences of Innovation and Business Strategy on Performance and
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Teece, D.J., 2019. A capability theory of the firm: an economics and (strategic) management
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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.
Lamour, C. and Lorentz, N., 2019. The economics of free newspapers: The business value of banal
cosmopolitanism in the city of flows. Journal of Media Business Studies, 16(2), pp.110-125.
Anastasiou, D., Louri, H. and Tsionas, M., 2019. Nonperforming loans in the euro area: A re core–
periphery banking markets fragmented?. International Journal of Finance & Economics, 24(1),
pp.97-112.
Wagner-Tsukamoto, S., 2019. In search of ethics: From Carroll to integrative CSR economics. Social
Responsibility Journal.
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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