Market Equilibrium and Shifts in Supply and Demand: Economic Analysis of UK Market during Christmas 2021

Economic

Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY..................................................................................................................................4
Basic Supply and Demand Equilibrium:.....................................................................................4
Supply Curve shift to the Right...................................................................................................5
Supply curve shift to the Left:.....................................................................................................6
Demand curve shift to the Right:.................................................................................................7
Demand curve shift to the Left:...................................................................................................9
Elastic Demand:.........................................................................................................................10
Inelastic Demand:......................................................................................................................11
Elastic Supply:...........................................................................................................................12
Inelastic Supply: .......................................................................................................................12
CONCLUSION ............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
The coronavirus pandemic has been a dreadful era of time which is yet in action. The year 2020
was the worst for most of the businesses in an around the world. The UK economy was hit
severely and saw the lowest GDP in last many years. During the second half of the year 2021,
the emergence of new covid-19 variant brought the economies working in and around the world
to put regulations on the markets. The UK government restricted the markets in and around the
country. The last minute lockdown brought the supply of different products in the market very
down and affected the availability of products during the celebration time of Christmas. The
supply was affected due to lack of lorry drivers and workers in the industry due to the
aftereffects of Brexit and Covid-19 restrictions. The workers were forced to leave their
workplace and return to their homecountries after the Brexit. The demand in the economy was
not able to meet by the suppliers as there were lack of resources to supply different products.
Demand refers to the term used in economics which refers to the number of goods and services
which the consumers in an economy are willing and able to purchase at a given price at a point
in time. The concept of demand in the theory of economics is based on the ability of the
consumers to pay for a particular good. The price which is paid for particular goods and services
is called the price, and the quantity which is being purchased by the consumer is called the
quantity demanded. For example, as the price of the water bottle rises, the demand for the same
decreases. This inverse relationship between the price and the quantity demanded is the law of
demand.
Supply refers to the number of goods and services which are produced by a manufacturer and
are supplied at a particular price (Acay, Bas, and Abdeljawad, 2020). The price at which the
quantity is supplied by the supplier is known as the price. That means, if there is any rise in the
price of the commodity, the quantity supplied for the commodity tends to rise as the producers
wish to supply more at an increased amount. For example, the market price of the ball pen in the
market rises, the producers supply more quantity to maximize their revenues and profit at this
higher market price. This positive relationship between the price and the quantity supplied is
known as the law of supply.
Market Equilibrium refers to the condition of equilibrium in the market where the demand and
the supply of the goods and services meet. The equilibrium price of the commodity is the price
at which the goods and services of the business are going to be sold and purchased. And the

quantity is the quantity at which it is going to be supplied in the market. This interaction is
important for an economy as it helps in deciding the price and the number of goods to be sold.
The following report highlights the concept of market equilibrium and how it is determined
when there is any shift in the demand and the supply of a commodity (Acay, Bas, and
Abdeljawad, 2020). Different aspects are discussed, including the demand and supply are elastic
and inelastic. The interpretation is made using the economic issues which developed in the
market of UK near to the Christmas of 2021.
MAIN BODY
The UK, in the second last and last quarter of the year 2021, has faced many challenges due to
the bad impacts of Brexit and the Covid-19 pandemic. The demand for the different goods and
commodities was at its peak in the holiday season of Christmas. The UK has seen a deteriorating
supply of necessary and luxury goods in the market due to the higher demand in the holiday
season. The supply related to turkeys and pigs was very low due to the decrease in the output
from these industries (Cherunilam, 2020). The main reasons for this decrease have been seen
due to the bad impacts of Brexit and Covid-19, like decreased production involuntary
unemployment due to the fewer workers from other countries. The different market conditions
are discussed below to better understand the conditions that have arisen in the case of the UK.