Supply and Demand Theory in Economics

Economics

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................4
Basic demand and supply 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....................................................................................................7
Elastic Demand...........................................................................................................................8
Inelastic Demand.........................................................................................................................9
Elastic Supply............................................................................................................................10
Inelastic Supply.........................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Demand is defined as the term of economics which analyse the desire of the individual to
buy the particular goods and services backed with the sufficient purchasing power at the given
prices at a particular point of time. The concept of demand is basically depends upon the ability
of the consumer to pay the specific goods and services to the customers(Hoang And et. al.,
2019). On certain amount, the particular products is beings sell is called as the price of the
commodity. The price at which the given products is being purchase by the consumer is known
as the demand of the respective goods. For instance, when the demand of the water bottles
increases then the demand or the same reduces due to high prices. This shows the inverse
relationship between the quantity demanded and he prices of the given goods in the market.
On other side the supply is the fundamental concept in which the goods and services of
the company is being produced by the manufacturer at the given prices. At a given prices, the
products is being offered to their prospective customer is known as the prices of the given goods
in the market. A particular quantity at which the given products is being offered to them is called
as the quantity supplied. For instance, when the market prices of the pen increases then the
supply of the same also increases as the supplier will generate more profits at higher prices in
order to maximise their revenue and profitability. There is the positive relationship between the
supply and the given prices of the commodity in the market is known as the law of supply.
Market Equilibrium is defined as the equilibrium in the market in which the demand and
supply of products and services are meeting. It is the state in which the price of commodity is
being made by the general consumer so that they offer the goods at affordable prices.
Equilibrium of goods and services are being offered at which the given products are being sold in
the market. Quantity demanded is the quantity which is being demanded by the consumer in the
market. It helps in having the better interaction for the economy as it helps in deciding the prices
and the number of goods to be sell further. This respective report analyse the concept of market
equilibrium and it is being determined in case of shift in the demand and supply curve. It
explains the various aspects that includes the demand & supply with its elasticity and in
elasticity. All such interpretation is being made by analyse the economic issue that has been
developed in the market of UK near the Christmas of 2021.

MAIN BODY
UK have faced the many challenges due to the huge impact of Brexit and Covid-19 in the
second last and last quarter of the 2021. There is huge demand of certain products and services in
the holiday season of Christmas. The people of UK are facing the huge deteriorating supply of
necessary and premium goods in the large market as there is high demand of goods in peak
season(Bai and et. al., 2022). There is the low supply of turkeys and pigs due to the minimum
output from the industries from the market. The main consideration for this reduction have seen
due to the huge impact of Brexit and Covid-19 will likely to be decreased production and the
involuntary unemployment takes place in the market due to the lesser employees from other
nations. The changing market conditions are further discussed to better understand the condition
that have arises in the United Kingdom.
Basic demand and supply equilibrium
The above given graph shows the market equilibrium at normal state as when the
marketing is working in an smooth manner and fulfilling demand of the potential customer by
supply sufficient products to them. Curve D is the respective demand curve that shows the
negative relation between the given price and the quantity of the given goods. Whereas the
Price
d
s
p
Quantity
q