Economics for Business Assignment : Polo mint
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Added on 2020-12-10
Economics for Business Assignment : Polo mint
Added on 2020-12-10
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TOPIC:Economics for Business
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1TASK...............................................................................................................................................1Explaining main factors for determining the price of Polo mints in UK using demand andsupply analysis............................................................................................................................1CONCLUSION................................................................................................................................8REFERENCES..............................................................................................................................10
INTRODUCTIONEconomics for business can be defined as a applied economics that includes varioustheories and methods that can help in analysing numerous situations and diversity in its wholestructure (Merigó, Rocafort and Aznar-Alarcón, 2016). Polo mint is a UK based company thatmanufactures various types of mint candies. The company was establishes on 1948. The presentassignment shows a description about relationship between demand and supply of the businessalong with showing their equilibriums. It also includes an explanation about the reasons thatresults in change in demand and supply. Further, the study also shows various impacts of changein demand and supply over the price of product. TASKExplaining main factors for determining the price of Polo mints in UK using demand and supplyanalysisDemand and supplyBoth demand and supply are the key factors of the economics of a business. Demandrefers to the amount or quantity of products that the customers wishes to buy (Buckley, 2016).On the other hand, supply refers to the quantity of products provided by the company forsatisfying the needs and demands of the customers.For the purpose of analysing relationship between demand and supply, the organizationneed to analyse and compare the amount of products demanded by the customers and number ofproducts supplied by the supplier. Further, for the purpose of determining the relationship between demand and price, Poloneeds to analyse the price at which the consumers wants to buy its mints and compare it with theprice at which the company is selling its products to them.Explaining equilibrium for demand and supply diagramDemand curve refers to a diagram that represents the dependency of demand of theproducts over the change in its price. The movement of demand curve of polo mints happenswhen various factors, like, inflation rate, change in preference of the products, etc. remainsconstant except of the price of products (Hao and et.al., 2017). The demand curve shows therelationship between the price and demand of polo mints. Further, if the price of polo mintschanges and results in change in the demand of products, it would result in shift of demandcurve. 1
On the other hand, Supply curve can be defined as a graphical representation in whichthe dependency of price of products over the supply of products. Generally, the supply curve isupward, slopping curve, as the when the price of product increases, the supplier increases thequantity to be supplied by them for generating maximum profits. In the supply curve, the priceof products keeps same. In case the price of product changes, the result will be shift of supplycurve. Equilibrium point refers to a point where two points meets. In context with the demandand supply diagram, equilibrium point can be defined as the point where both demand andsupply curve meets. In the market, the equilibrium price point is achieved when for a specific amount ofquantity, the highest price that the customer can pay for the products equates with the minimumprice at which the supplier wants to sale the product (Amlung and et.al., 2015). On the otherhand, the quantity equilibrium point can also be achieved in the economic market when for aspecific price, the minimum quantity of products that the customer wants to get equates with themaximum amount of quantity that supplier can provide to its buyers. Therefore, it can beanalysed that the equilibrium can be defined as an agreed point between the customer andsupplier of products. The change movement in demand and supply curve also effects the equilibrium point ofthe curve. Price equilibrium point can be get by balancing both demand and supply over a certainprice. The equilibrium price can be easily understand by analysing demand and supply diagramas under:For example, if the price of Polo mints gets reduced, the quantity of mints will beincreased. On the other hand, due to reduction in price of product, the supply of product will alsoreduce. This situation would lead in shift of both demand and supply curves. In this regard, theequilibrium price point will be get as follows:2
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