Contemporary Economic Analysis of Unilever: Law of Demand and Supply Curve

Contemporary
Business Economics

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
Explaining Law of demand along with movement of demand curve and factors that effects the
demand curve..............................................................................................................................3
Elaborating Law of supply, supply curve and elements effecting the supply curve...................6
Task 2...............................................................................................................................................8
Distinguishing between different economic theories from 20th and 21st century and their
application in the modern economics..........................................................................................8
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Micro economics is a sub - division of economics which analyse the level of attitude of
the businesses, firms and households. It can also justify that how the decisions are taken at a very
small scale by keeping in mind the factors of demand and supply and marginal
utility(Amjad ,2020). Unilever is a British multilevel retail consumer company which generally
deals in foods, ice-cream, beauty products and personal care. It was founded in the year 1929. In
this report, law of demand and law of supply of the company Unilever and with the inclusion of
diagrams to explain the law of curves while using the market forces.
TASK 1
Explaining Law of demand along with movement of demand curve and factors that effects the
demand curve
Law Of Demand
The law of demand represents that cost and the amount of the any product and services
fluctuates and all the other factors remain constant which are inversely in proportion to each
other. When the cost of a product increases the, the demand for the product will fall and when
the cost of product decreases the demand of the product will increase. Law of demand
demonstrates the nature of the consumers when the price of a product changes. In the market,
prediction of the other characteristic which affects the demand remains constant and the cost of
a product rises automatically which leads to the decrease in the demand of the product. It is a
very common human tendency. It occurs because the consumer is not ready to pay more for the
product and also having the fear of going out of cash (Bachnik, and et.al., 2020).
Demand Curve for the Unilever products:
When the demand of the goods changes, the customer responds by decreasing the
purchasing power of a product. It occurs when all the other factors are different but the price and
quantity remains constant.

The diagram which is shown above represents the demand of the curve which is a
downward sloping. Gradually, the cost of the product increases and the price p3 and p2, then the
demanded quantity comes down from Q3 to Q2 and the back to Q3 or vice-versa. This demand
curve shows that the negative relation between the price of the product and its quantity
demanded (Costa-Climent and Martínez-Climent, 2018). In this demand curve Q2 is the initial
quantity demanded and p2 is the initial price of the commodities. If there is a increase in the
quantity demanded from the Q2 to Q3 the price of the commodities will decrease from p2 to p1.
On the other hand, if there is a decrease in the quantity demanded form Q2 to Q1 there will be a
increase in the price from p2 to p3. This represents the inverse relation between the two
variables.
Figure 1: Demand curve of Unilever