Business Economics Assignment - Polo Mint
12 Pages3005 Words468 Views
Added on 2020-10-22
Business Economics Assignment - Polo Mint
Added on 2020-10-22
ShareRelated Documents
Economics of Business
INTRODUCTIONEconomics of business means using economic theories and methods to analyse businessenterprise and its factors. Or it refers to apply economic concepts to real business situation.Economics is necessary for every business, as resources are scarce and should be used in bestpossible way thus economics make optimum utilization of scarce resources. .The present studyis about theory of demand and supply analysis and different factors affecting price of Polo Mintin UK. In addition to this a brief study is done on determining price of Polo Mint using demandand supply curve. Also a depth study is done on effect of equilibrium on demand and supplycurve and.TASK 1Theory of Demand and supplyDemand-refers to need or want of an individual to buy a product or demand is formedwhen an individual have will to buy a product in addition to this having money to buy thatproduct. The quantity demanded for a good or service is the amount an individual plan to buy ina particular period of time at the available price.Law of Demand states that price and quantity demanded are inversely propotional toeach other or other things remain constant demand and price have inverse relationship betweenthem. The law of demand have two effects-a) Substitution effect means if price of quantitydemanded increases then consumer will shift to substitute of the product which leads to decreasein price of quantity demanded. b) Income effect means if price of goods and services increasethen people cannot afford all the things which they were buying , on other hand if income of theconsumer increases then people can afford all the things which were bought by them previouslyeven if price of product and services increases.Assumption of law of demandIncome of the consumer remains constant Habits and preferences of consumer remains constantThere is no change in technologyThere will be no change in future price of the commodity There is a restriction on distribution of income there is no change in income of the consumerthere is no change in government policies.1
Demand Curve and demand schedule- Demand curve is the graphical representationwhich show different quantity demanded at different price on the other hand demand schedule isthe tabular representation that shows relationship between different quantity demanded atdifferent prices.Exception of law of demand- a) Giffen Goods- Law of demand fails in case of giffengood, means those goods for which demand increases with the increase in price .For ex. Irishpeople love to eat potatoes ,so after some time price of potatoes increases but people in Irish didnot shift to other substitute rather they were cutting their budget on other expensive meal likemeat and beef . Therefore, here demand of potatoes increases with the increase in price. Thesecond exception is Article of distinction means those goods which are luxurious and are highlyvaluable for ex. Diamond , if price of diamond decrease people will not purchase it , as diamondis purchased because of its high price and value and this become an exception of law of demand.Types of Demand- There can be following types of demand -Income demand- means consumer will buy different quantities of a product or service atdifferent level of income. If income of the consumer increases then it will increase thedemand of commodity unless the product is of inferior quality and if income of theconsumer decreases then quantity demanded will also decrease .Joint demand – refers to a demand when two products are demanded jointly at the sametime. For ex. If one has demanded to construct a house then this need several other thingslike bricks, cement ,lime etc. .Similarly, one need so many things to prepare a bread likeflour, oven, fuel etc.Composite demand - It means demand of that product which can be used for severalother purpose. For ex. Coal can be used in domestic fuel, railway engine, factories etc .Similarly, milk can be used to prepare curd, butter , cheese etc.Derived demand - It means demand for those commodities which is used to make orprepare another goods or service. For ex. Demanding inputs and other factors like laborand raw material, to build a complex. Here demand of labour and raw material is derivedor indirect demand as it is helping in constructing a complex.Market Demand – Refers to demand when a group of people buying different quantitiesat different prices at the given time. For example Five people are buying 2 kg, 3 kg, 1 kg,4 kg and 6 kg of apples, this is called market demand.2
End of preview
Want to access all the pages? Upload your documents or become a member.
Related Documents
Business Economics Assignment (PDF)lg...
|16
|3646
|375
Economics for Business - PDFlg...
|12
|3003
|233
The Kilimanjaro Institute of Technology and Management Assignment PDFlg...
|5
|1468
|163
Economics for Business Assignment - Polo mint UKlg...
|15
|3163
|486
Economics for Business Assignment : Polo mintlg...
|13
|3189
|148
Business Economics Assignment Solution (Doc)lg...
|12
|2884
|459