Economics for Business

ECONOMICS FOR
BUSINESS

EXECUTIVE SUMMARY
In this report defining law of supply and law of demand of food market in UK sector.
Secondly Movement along with supply curve and demand curve of the food supply are showed.
Further, Shift in supply curve and demand curve by rightwards and leftward shift. Also,
Equilibrium level by change in price and quantity and brief concept of shortage and surplus in
demand and supply. At Last, economic policies of UK government that impact during Covid-19
and fails to meet requirements.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY. .................................................................................................................................4
Task 1...............................................................................................................................................4
Law of demand and Law of Supply.............................................................................................4
Movement along with supply.......................................................................................................5
Shift in supply curve....................................................................................................................5
Movement along with demand curve in food..............................................................................7
Shift in demand curve of food.....................................................................................................8
Equilibrium price and quantity..................................................................................................10
....................................................................................................................................................10
Task 2.............................................................................................................................................11
CONCLUSION..............................................................................................................................13
REFERENCES................................................................................................................................1

INTRODUCTION
Demand and supply is the important concept of economics. The concept of supply refers
to total quantity supplied by the sellers in market to meet the demand of consumers. Sellers
increased their demand at a time of higher price to earn more of profits. On the other hand,
demand refers the interaction between Buyers and sellers. The quantity demand are changes
according to change in price of goods and service.
The quantity demand of UK food chain in different manner they are affected through
price and different factors that makes the demand and supply curve shift or movement along with
it. Equilibrium shift in quantity demand and quantity supply on the same curve. Further
economic principle are being also mentions and in different manner their intervention in supply
and demand of food.
MAIN BODY.
Task 1
Law of demand and Law of Supply
Law of supply shows that higher price of goods and leads to higher supply of goods in
market while all other factor remains constant. It states that suppliers are willing to supply more
at a high price and lead to suppliers increases their supply of food in market (Saleem, and et.al.,
2021). At higher price, suppliers want to earn profits by selling more goods and supplier
increased their quantity supply in market on higher price. But It also results in reduction of
quantity demand of goods in food market. However, quantity supply of food is high in food
market.
Law of demand The Law of demand shows that, increase in price of food leads to
reduction in demand while all other factor remain constant. It refers to relationship which shows
the higher price of food results in lower quantity demand by consumers. It has direct
relationship between quantity demand of food and price of food. Quantity Demand of food can
be change if there is a change in price of food products. The supply of UK food chain has being
changing and have high frequency of changes. Whereas, Consumer reduce their quantity demand
for foods if the products are avoidable and not comes in category of necessity goods (Zhang,
Duan, and Du, 2021). Consumer will consume only those goods that are necessary for living
I.e. wheat and rice. The variation in price of food products leads to directly impact on its quality
demand and quantity supply in market.

Movement along with supply
Movement along with supply curve shows the positive relation between price and
quantity supply of goods by different supplies. The moment of supply of goods I directly
affected through price where other factors remain constant. There are two type of moment shows
on the supply curve:
Downwards movement along with supply curve shows if there is a decrease in price of
food in UK led to fall in quantity supplied of product. It shows relationship that if price of food
product falls then seller decreases its quantity supply in a market other factors remain same and
to avoid less profit and avoid losses by supplying in lower price (Burgess, and et.al., 2020).
The upward movement shows rise in price of food leads to rise in quantity supply of food
in market. It shows that at higher price of food in market supplier increases their supply in
market to earn higher profits by selling at higher prices. But this directly affect quantity demand
of consumers which leads to decreases for such goods.
Shift in supply curve.
Rightward shift of supply curve states that there is an increase in supply in market by the
suppliers due to other factors and without any fluctuation in price (de Gorter, and et.al., 2021).
Illustration 1: Movement along with
supply curve

Shift in supply curve results in because of other factor that change and increase in supply of
food products in market. The change in supply can be increase by any favourable factors that
cause shift in supply curve.
Illustration 2: Rightward shift in supply curve
For example: The rightward shift in supply curve is affected through other factors other
than price. The other factors like increase in income of consumers leads to increase in demand
of food products in market that cause rightward shift in supply curve. The price of products has
not changes but demand increases with increase in income of consumers (McKay, Bastian,and
Lindberg, 2021). Consumers are willing to consume more food products that and results in
increase in supplies. The above digram shows the price line which is constant. Increase in
consumer's income increase the demand of food which increase the supply curve and shift
rightward from Q to Q1 and found new supply curve.
Leftward shift in Supply curve: Leftward supply shows reduction in quantity supply of food
products in market because of unfavourable factors that affected through some other factors
while price remain constant. These factors directly affects the supplies of market and suffers
from losses or increase in cost.

Illustration 3: Leftward shift in supply curve
For example: The leftward shift in supply curve shows the constant price line of food
products in market. The other factor which affect supply curve can be old technology factor
that is being used by sellers for producing of goods. This cause increase in cost and unable to
meet the margins through constant price of products. It leads to leftward shift in supply curve
without any change in price of products (Grobbelaar, Verma, and Shukla, 2021). Seller willing to
produce less with old technology used to produce and shows leftward shift in quantity supplied
from Q to Q1 and supply curve sift leftward from S to S1. Like if the production of Wheat cause
high cost to supplier and reduce the margin due to old technology used. It automatically reduces
the quantity supply of that product.
Movement along with demand curve in food.
Movement along with demand curve of food products results in Change in price cause
Movement along the demand curve of food. Movement towards upwards shows contraction in
movement and downward shows expansion in demand curve and shows increase and decrease in
quantity demand whereas, other factors remain constant.
Upwards movement and downward movement in demand curve: The upward
movement shows when prices of food products increases in market it reduces the quantity
demand for food products and shows upwards movement along the demand curve. While the
other factor remain constant and suppliers are willing to sell more at this point (Deconinck,
2021).

On the other hand downward movement shows reduction in price of food product in
market leads to increase in demand for food product by consumers. It shows that consumers are
willing to purchase more food products at a time of low price and increase their quantity demand
in market to consume more. However, suppliers are willing to supply less goods due to low
margin in market and to avoid the losses by reducing the price.
Shift in demand curve of food.
Shift in demand curve shows the changes in demand curve through leftward and
rightward because there is a change in other factor where prices for goods are unchanged. The
rightward movement states there is an increase in quantity demand of food and leftwards shows
there is a decrease in quantity demand of food by consumers (Jeswani, Figueroa-Torres, and
Azapagic, 2021).
Shift leftward and rightward in demand of food supply:
The rightwards shift shows demand curve shift towards right due to other factors that
affect food product in favourable condition wile prices are same. The consumers increase the
demand of food product and willing to increase their demand of purchase of food to and new
demand cure is found.
Illustration 4: Rightward shit in Demand Curve

For example: The rightward shift in demand curve shows the increase in demand without any
change in price of products. Here other factor affect the demand curve and make rightward shift.
The increase in price of substitute goods cane be result of rightward shift in demand curve
(Messner, Johnson,and Richards, 2021). If the price of substitute goods like rice increase in
market, then it results in increase in demand of wheat by consumers without any price change. It
makes rightward shift in demand curve from D to D1 with a same price line of P. It shows that
price of other good affect the demand of substitute good in market.
Leftward shift in demand curve: The decrease in demand curve without any change in price of
goods shows the leftward shift in demand curve. This is due to unfavourable factors that affect te
demand curve of goods in market without any change in price.
Illustration 5: Leftward demand curve
For example: If there is decrease in demand curve due to other factor without any
change in price result in decrease in demand curve. This factor may decrease in income level of
consumers, where consumer are reduced there quantity demand of food in market due to low
income. It affects the demand curve and decrease in market demand. This shift demand curve
from D to D1 within same price line of food products. The quantity demanded by consumers is
also shifted leftward from Q to Q1.

Equilibrium price and quantity.
Equilibrium quantity refers to point where demand and supply are balanced in c country
market and equilibrium price shows at a point of price where quantity demand is equals to
quantity supplied. Whereas, equilibrium quantity refers to point where quantity demand and
quantity supplied shows at point of equilibrium price.
Illustration 6: Equilibrium price and quantity
Interpretation: The above graphs shows the point 2 new points which are found after the
change in quantity demanded and quantity supplied. The quantity demand shift from D to D1
while supply remains the same. It also found new equilibrium point where price is also changed
from P to P1 (Roe, Bender, and Qi, 2021).
Shortage in country means it is a point where excess in demand of quantity of goods is
exceeded quantity supplied by seller and appears below equilibrium price. It shows that quantity
demand exceed quantity supplied in market due to low prices and high demand of products in
market.

For example: when there is an excess demand of goods like apple in market due to low
price in market while the producers are unable to meet the consumer demand and shortage of
apple quantity occurred.
Surplus in market referred to point where excess supply of goods are available in market
and exceed consumer's demand for goods at a specific price. It is a difference between actual
price of goods in market and lowest price at which producers are willing to sell goods. It show at
a point above equilibrium price. However, quantity supplied exceed quantity demand in market.
For example: Excess in supply of apple in market due to high price and to generate High
revenue from market, seller will increase there supply of apple in market.
Task 2
Poverty programmes: The Impact of Covid -19 had affected 700,000 new poverty
people which is almost 25% below poverty line in UK and some are even in deep poverty which
shows more than 50% of poverty in country. The government initiated certain poverty programs
at a time of lock down that create survival in country for locals who are not able to afford
necessary items. These program include distributing Free food and drinking water supplied by
welfare organization and government and locals which are highly affected and unable to attain
their basic need for days. The trust name Trussell working as a nationally in UK which have
almost 1200 food banks around country. They work with government to provide free meals to
scholars and work for reason to reduce poverty in country (Al-Saidi, and Hussein,2021). Covid-
19 had highly affected UK country and local citizen and suffered almost 700,000 people which
also include 120,000 children had penetrated poverty due to high economic crises. The UK food
supply chain was highly affected and unable to achieve market requirements of basic food and
water. However, there are some other programs too which are initiated by UK government like
Lack of education in country due to Lock-down and provide necessary assistance to students by
providing study material and financial providing.
Price control: Pandemic hit the country quite hard which affect the production and selling of
goods and service by company. The food price products are being increased by company and
local vendors which are charged very high from consumers. Some goods are very much affected
from Covid-19 which are necessity goods like food, medicine and water. The demand for these

goods rises rapidly in market and increased prices by supplier affect the pending power of
consumers in UK market. To control the over spending of people in market, company implied
price policy on certain goods on suppliers and producers. This policy shows that suppliers will
not charge high from consumers and set a limit of prices on products. UK's government makes
certain policies which are applicable on suppliers in order to protect the consumer interest and
fair trading of goods in market (Vittuari,and et.al., 2021)
Availability of resources: UK's government affected from Covid-19 because of unstable
economy condition which directly impacted to food supply of UK market. The import and export
of goods are being almost diminished over the time which is also one of the reason to affect the
market availability of resources. As, UK is almost dependent on other country in food market
which affect due to Covid-19. The consumers are demanding more of goods and increase in price
of goods in market. While the suppliers are unable to meet the demand of consumers after the
certain point of time. The UK suppliers had seen many problems arises for food demand and
supply in market as UK government is not well-prepared for the uncertainty arises due to
pandemic and hence result in shortage in market of necessity goods.
Fiscal Policy: These policies are being implied by UK government during the pandemic and
shows result of decrease in prices of products, taxes charged buy government and, interest rate
on investment and many other factors are being considering by UK government in order to
maintain the UK economy. UK's government is using automatic fiscal stabilizer to balance
uncertain shock and fluctuation of demand and supply. To determinant economic stabilizer,
government absorbs risk and crises faced by individual household and firms. Pandemic results in
Higher unemployment in country, kick-off with 10-15% for housing and other benefits payment
for UK citizen. Consumers Food Demand had increased during lock-down but faced insufficient
food supply to consumers even at a higher prices. The interest are being decrease in country in
order to get more investment and to generate employment in country. These policies are being
used during Covid-19 by UK government (Mandal, and et.al., 2021).
The above reason conclude that UK government had faced many challenges during
Covid-19 which somewhat failed to attain all challenges during the pandemic. It can be
disagreed that UK government is unable to meet the all requirements of consumers. UK's
government is not well-prepared for the pandemic which is very essential for government to

sustain the emergency. The polices execution is not well planned and execution which affect the
overall population. Only certain programs which are run by NGOs are working properly but UK
government which are unable to meet the food supply in market an also unable to meet the
customer demand to provide with necessity goods. Lack of import of goods and maintaining
suffering stock of food products in country should be preserved by Government to survive in
these products. The UK government also fails to execute fiscal policies properly which are able
to meet the consumer demand and maintain economy to survive.
CONCLUSION
The above report conclude that, UK demand and supply market of food in very fluctuated
and changes very frequently. Demand shows the opposite relationship with price and supply
shows the direct relation with price. Whereas, equilibrium price and quantity are being changed
and adjust according to new demand and price automatically. Lastly, UK government had
implied certain economic polices to protect economy and sustain in market but fails at some
point due to lack of planning and execution.

REFERENCES
Books and journals
Al-Saidi, M. and Hussein, H., 2021. The Water-Energy-Food Nexus and COVID-19: Towards a
Systematization of Impacts and Responses. Science of The Total Environment,
p.146529.
Burgess, M., and et.al., 2021. The future of UK plastics recycling: One Bin to Rule Them
All. Resources, Conservation and Recycling. 164. p.105191.
de Gorter, H., and et.al., 2021. Analyzing the economics of food loss and waste reductions in a
food supply chain. Food Policy. 98. p.101953.
Deconinck, K., 2021. Concentration and market power in the food chain.
Grobbelaar, W., Verma, A. and Shukla, V.K., 2021, January. Analyzing Human Robotic
Interaction in the Food Industry. In Journal of Physics: Conference Series (Vol. 1714,
No. 1, p. 012032). IOP Publishing.
Jeswani, H.K., Figueroa-Torres, G. and Azapagic, A., 2021. The extent of food waste generation
in the UK and its environmental impacts. Sustainable Production and Consumption. 26.
pp.532-547.
Mandal, S.C., and et.al., 2021. The impact of the COVID-19 pandemic on fish consumption and
household food security in Dhaka city, Bangladesh. Global Food Security, p.100526.
McKay, F.H., Bastian, A. and Lindberg, R., 2021. Exploring The Response Of The Victorian
Emergency And Community Food Sector To The COVID-19 Pandemic. Journal of
Hunger & Environmental Nutrition, pp.1-15.
Messner, R., Johnson, H. and Richards, C., 2021. From surplus-to-waste: A study of systemic
overproduction, surplus and food waste in horticultural supply chains. Journal of
Cleaner Production. 278. p.123952.
Roe, B.E., Bender, K. and Qi, D., 2021. The impact of COVID‐19 on consumer food
waste. Applied Economic Perspectives and Policy, 43(1), pp.401-411.
Saleem, A., and et.al., 2021. A Water Evaluation and Planning-based framework for the long-
term prediction of urban water demand and supply. SIMULATION,
p.0037549720984250.
Vittuari, M., and et.al., 2021. Envisioning the Future of European Food Systems: Approaches
and Research Priorities After COVID-19. Frontiers in Sustainable Food Systems. 5.
p.58.
Zhang, Y., Duan, D. and Du, D., 2021. Coordinated Development of Innovation System in
China’s Yangtze River Economic Belt, a Demand and Supply
Perspective. Sustainability. 13(1). p.178.
Online
How Corona Virus is changing Grocery shopping. 2020. [Online]. Available through:
<https://www.bbc.com/future/bespoke/follow-the-food/how-covid-19-is-changing-food-
shopping.html>
Coronavirus: 'There is plenty of food in the supply chain'. 2020. [Online]. Available through:
<https://www.bbc.com/news/av/uk-51989833>
1

Effects of COVID-19 on the food supply system. 2020.[Online]. Available through:
<https://post.parliament.uk/effects-of-covid-19-on-the-food-supply-system/>
COVID-19 and the digital divide. 2020. [Online]. Available through:
<https://post.parliament.uk/covid-19-and-the-digital-divide/>
2