UK Economy Analysis and Research Trends

This assignment requires an analysis of the United Kingdom's economic performance in 2017. Students need to examine key indicators such as GDP growth rate, inflation rate, and unemployment rate using provided data from sources like Trading Economics. Additionally, students must delve into academic research papers exploring topics like UK competitiveness, innovation within SMEs, workplace greenery, and the impact of technological advancements on the economy. The analysis should draw upon both quantitative data and qualitative insights from scholarly works.

UNIT 55 BUSINESS
ECONOMICS

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Outlining the summary of UK economy, its economic system and characteristics...............1
TASK 1............................................................................................................................................1
(1.1) Discussing the scarcity problem and allocation of resources in organisation...............1
(1.2) Outline significance of supply and demand as well as equilibrium in an economy......2
(1.3) Evaluate different kinds of market systems and opportunity costs in economic system3
(1.4) Outlining demand elasticity and significance of it........................................................4
TASK 2............................................................................................................................................4
(2.1) Discuss the implications of pricing as well as corporate objectives..............................4
(2.2) Comparing market structures in terms of determining price of products by organisation. 5
(2.3) Discuss impact of UK regulations on market power.....................................................5
TASK 3............................................................................................................................................6
(3.1) Evaluation of changes in economic structure of UK and its impact on the organisation6
(3.2) Outline the evaluating tools available to meet macroeconomic policy making in the UK 6
(3.3) Provide economic performance of UK country with reference to GDP growth rate,
inflation and unemployment indicators..................................................................................7
TASK 4............................................................................................................................................9
(4.1) Discuss the theory of competitive advantage with reference to emerging economies
against UK .............................................................................................................................9
(4.2) Evaluate impact of developing economies on UK.........................................................9
CONCLUSION..............................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Economy is largely impacted by the performance of companies. This can be seen on UK
as well. The enclosed report deals with Co op food organisation which is producer of grocery
items and had impacted by scarcity of resources and this directly impacted UK economy. The
demand and supply has inverse relationship between them. The demand elasticity also plays
important role in the organisation (Boons and et.al, 2013). Pricing decisions should be made by
organisation in accordance to the competitors else, customers' will be attracted to them. As such,
lower or competitive prices should be implemented by the company.
Outlining the summary of UK economy, its economic system and characteristics
UK is the world's largest economy and is ahead of other countries in terms of growth and
development. UK has high GDP rate which makes it a developed nation. In contrary to this,
current GDP rate is declined as from 2015 to 2017 year, rate has come down to 0.5 to 0.3 %
which is because of recession prevailing in the country. UK has adopted mixed economic system
which comprises socialist and capitalist. In simple words, blend of socialist and capitalist is
adopted by UK which helps to take better and enhanced decisions having concern of society
upliftment and at the same time industrial growth is initiated. Following are characteristics of
UK :
 The government of UK has enacted strict rules and regulations over private industries.
 In the economy of UK, there is perfect blend of Private and Public sector which is
focused on both the aspects and as a result, private firms tries to maximise profit and at
the same time, public enterprises focus on upliftment of the people at large.
 Advantage of mixed economic system is that it is a planned economy and allocates
resources effectually.
 Private firms earns profit and this ultimately helps welfare of the society with much ease.
TASK 1
(1.1) Discussing the scarcity problem and allocation of resources in organisation
The scarcity problem arises when company is not able to meet the basic demand of public
and as such, demand and supply goes in inverse relation (Cowling, Liu, Ledger and Zhang,
2015). Co op food company has also faced similar situation of unable to cope up the increasing
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demand of the customers' in the market. Co op food is a firm which sells grocery items to
customers. For meeting demands of them, enhanced decisions to be formulated and implemented
by it so that it may be able to meet the demands of public at large. This will help to eradicate
scarcity issue in the country in the best possible way.
Government of UK had taken certain steps so that demands may be fulfilled up to great
extent and scarce issues may be solved by organisation in the best possible manner (Disch,
2016). Government had provided with quality seeds so that better production may be
accomplished effectually. This helped company to meet demands of public as demand and
supply was elastic. The scarcity problem was resolved with the help of steps taken by the
government and demand was met. Moreover, prices were hiked of the vegetables and this helped
organisation to meet the scarcity problems with much ease.
(1.2) Outline significance of supply and demand as well as equilibrium in an economy
Demand and supply plays an important role in the economy. Demand may be explained
as the willingness of customers to pay for the items. In contrary to this, supply is goods and
services provided to customers' by taking price as consideration. To achieve stable growth in an
economy, perfect balance of both demand and supply should be made effectively. Demand and
supply has an inverse relationship between both of them. This means that when one factor
changes, the negative aspect can be seen on other one.
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The equilibrium means that demand and supply curves intersects at a point. The
equilibrium shows that demands are effectively met by the Co op food. Apart from this, when
changes occurred in both the aspects, equilibrium shifts either upward or downward showing
effect of demand and supply (Ferri and Maber, 2013). Equilibrium provides support to carefully
make assessment by Co op food to sell its products at a particular price. In the diagram, x axis
represents price of product and y axis shows quantity demanded by consumers. The demand and
supply should be at an equilibrium point so that consumers' needs and requirements may be
fulfilled by Co op food in the best possible way with much ease.
(1.3) Evaluate different kinds of market systems and opportunity costs in economic system
The different types of market systems are as follows :
1. Perfect competition market:
This is market system in which organisations sells homogeneous or similar products in
the market. The main feature of this system is that customers' know the prices of the products
and as a result, they cannot be fooled by organisation. The firm are price takers and prices are not
formed by it as customers' know the market conditions. Moreover, there is freedom of entry and
exit of firms.
2. Monopoly market:
It is a market in which there is only one seller and as a result, monopoly prices are quoted
by it. In addition, there are many buyers and as there is only one seller, customers' have no
choice than to buy from him. In simple words, seller is a price maker of goods. He charges
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Illustration 1: getpushing.com

different prices of same products to various buyers. Profits is maximised as no competition
prevails in the market.
3. Oligopoly market:
The oligopolistic market is a market in which there are many buyers who purchase
commodities but sellers are few. This market has lesser competition than perfect market system.
Oligopolistic firms enjoy profits as they are few (Galindo and Méndez, 2014).
Opportunity cost is the income which is earned by foregoing another alternative available
with it. Co op food is bale to determine best options for purchasing raw materials from the
suppliers so that lower cost may be incurred. Hence, pricing decisions is made by it by selling at
competitive prices and ensuring lower cost of raw materials. Thus, opportunity cost is the benefit
that could have been achieved when Co op food would have use any other markets for selling
goods. The loss can be covered by selling at high cost in other markets. Hence, opportunity cost
is essential tool for taking better and effective economic decisions.
(1.4) Outlining demand elasticity and significance of it.
Elasticity of demand is used to assess changes in demand for a commodity when other
economic factors undergo changes such as price and income of customers'. There are two types
of demand elasticity such as cross elasticity of demand and price elasticity of demand. Co op
food uses these types to measure changes which is initiated by collecting data on price changes
and how customers react to such changes (Guerrero, Cunningham and Urbano, 2015). This is
important for Co op food as it analyses as the demand changes for vegetables and how changes
occur in price of the goods and as a result, it may be able to set prices of commodities by
measuring demand elasticity effectually.
Customers' demand for elastic as well as inelastic products and this may be useful for
price discrimination decision by it. Moreover, creating chances of international trade and shifting
burden of tax which affects price and as a result, demand elasticity concept is fruitful for the
organisation.
TASK 2
(2.1) Discuss the implications of pricing as well as corporate objectives
The implication of pricing factor is useful for organisation as through this it can charge
prices in accordance of how much profit may be generated after charging prices of products in
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effective way. It is quite useful for Co of food as when scarcity problem in UK regarding to the
vegetables was aroused than it relatively charged high prices for vegetables to control the
demand. As such, pricing helps to control demand and supply in effective way.
Profitability is affected when prices are charged less or more and this affects profits of
company. Co op food will not able to generate profits when prices are charged less. Thus, it can
be conveyed that due to changing in price implications, objectives of Co op food also changes
too much extent. Pricing is an important phenomenon as when prices are charged less, customers'
will get attracted but profit will deteriorate. However, when prices are charged more, customers
will not be attracted (Huggins and Thompson, 2016). As a result, company should quote
competitive price so that profits may be earned effectively with much ease.
(2.2) Comparing market structures in terms of determining price of products by organisation
The comparison of different types of market for determination of price is as follows :
Perfect competition market :
The perfect competition market comprises cut throat competition as buyers completely
know the market and sellers are not able to charge high prices. In simple words, buyers have full
knowledge of the market and they cannot be fooled by the sellers (Lee, Pham and Gu, 2013).
When the Co-op Food operates in perfect market than it has to determine prices in accordance
with the sellers which prevails in the market which provide same cost of vegetables to the
customers' at large.
Monopolistic environment :
The main feature of this market is that only one business entity offers goods and services
to customers. Here, customers have no choice than to purchase commodities from single seller.
As a result, price is determined by the seller under which buyers cannot either interfere or
bargain. Monopolist charges exorbitant prices as no competition prevails in the market and as a
result, profits are generated with much ease. Moreover, performance of firm improves with much
extent in comparison of other market systems.
Oligopolistic environment :
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The oligopolistic market is dominated by few firms and as such, profits are more as no
competition exists like perfect competition market. Firms have majority power to bargain of
prices and as such, Co op food is able to generate higher sales and in turn more revenue is
generated by it with much ease.
(2.3) Discuss impact of UK regulations on market power
In every country, there are different regulations and rules that are formulated by the
government and that has to be followed by the organisation to run smoothly in the market. UK
government has also enacted rules that are to be followed by Co of food so that it may be able to
function properly with much ease (Lottrup, Grahn and Stigsdotter, 2013). If government
increases tax rate on vegetables than, it adversely affects Co of food company as profits gets
reduced and expenses gradually increases.
As, taxes are increased, then company has no other option then to shift from one market
to another market in search of profits. For example, when Co op food shifts monopoly market to
perfect competition market, then level of prices also fluctuates as customers' have perfect
knowledge of prices of products in the perfect competitive market. While, monopolist
environment is different from it. Besides this, if government enacts changes in international
trade, then also impact may be seen on the company. Hence, it may be said that regulations and
rules affects company in adverse manner which leads to deterioration of profits and as a result,
firm is not able to generate sales (Love and Roper, 2015).
TASK 3
(3.1) Evaluation of changes in economic structure of UK and its impact on the organisation
The economic structure of UK has undergone certain changes in 21st century. The
economy of UK was lower and considered as developing nation in the world. But in recent years,
economy has initiated changes as industries like services, manufacturing etc. are comparatively
increased that was not before 21st century and which has impacted positive growth rate of UK.
The market structures are developed and as a result, Co of food is benefited by it as earlier,
generate more number of profit was not possible by it.
The company is able to generate more production of vegetables and as a result, revenue is
effectively generated by it. It can be seen that economic structure drives company in positive
manner. As markets are developed than, industry is able to perform better and as a result, more
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profits may be produced by it in the most proficient way. When economic structure of country is
not adequate than company is not able to perform effectually and which ultimately leads to fewer
profits by it. This highlights significance of economic structure of UK and its impact can be seen
on Co op food effectively with much ease.
(3.2) Outline the evaluating tools available to meet macroeconomic policy making in the UK
The tools which is used by the government to meet macroeconomic policy are monetary
policy and fiscal policy as well (Kagel and Roth, 2016). These policies are useful as it generates
growth rate and full employment may be seen in the nation with much ease. These
macroeconomic policies are described below :
1. Monetary Policy -
The monetary includes interest rate, cash reserve ratio (CRR) and statutory liquidity ratio
(SLR) in which Central bank of England initiates changes for the betterment of the nation
effectually. It helps company to have proper allocation of resources in the best possible way and
flow of money is effectively managed with the help of this policy. The inverse relationship is
observed in this policy. When government charges higher taxes, then revenue of Co op food
declines. Moreover, if CRR and SLR rates are increased, then more amount of loan may be not
given to company and capital is automatically reduced too much extent of the organisation.
2. Fiscal policy -
Fiscal policy is different from the monetary as it includes taxation rate, tariffs, export
import rates which affects performance of the organisation in adverse manner (Atkinson and
Stiglitz, 2015). When government increases tariff rates, then company has to pay more taxes and
as a result, profits are declined.
(3.3) Provide economic performance of UK country with reference to GDP growth rate, inflation
and unemployment indicators
1. GDP growth rate-
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Illustration 2: UK GDP rate 2017
2. Inflation rate
Illustration 3: UK Inflation rate 2017
3. Unemployment rate
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Illustration 4: UK Unemployment rate 2017
From the charts, it may be analysed that from the end of financial year 2012 to 2017 GDP
rate of UK economy declines from 3.1% to 2% which is not a good sign and performance has
reduced considerably (United Kingdom GDP Growth Rate). In addition to this, inflation rate is
increased from FY 2012 to 2015 which shows that economy is improving (United Kingdom
Inflation Rate). But after that from year 2016 up to 2017, inflation is increasing on consistent
basis and this is due to recession prevailing in the country. Unemployment rate is also reducing
(United Kingdom Unemployment Rate).
When performance of economy is linked with entity, then it affects it. This is because
flow of money is reduced in the society and as a result, economic conditions should be stable so
that economy may be strengthen. When purchasing power of customers' is reduced, then it
affects organisation as profits are ultimately declined.
TASK 4
(4.1) Discuss the theory of competitive advantage with reference to emerging economies against
UK
The competitive advantage is termed when unique products are sold by company at lower
prices. In addition to this, Co op food is able to make more revenue as profits are maximised by
lowering prices of products. In relation to this, free trade is also beneficial for company as
exchange goods and services takes place with international firms without following any rules and
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regulations and also without taxes. However, if economic condition of one nation is declined
than it directly affects another (Brue, McConnell and Macpherson, 2016).
Globalisation is also impacts company as through this it enters into international market
and also much needed foreign currency. Moreover, it provides innovative products to lure
customers at low prices which is the demerit of it. Globalisation is however effective aspect as
firm come to know about the demands and needs of foreign customers' and as a result, goods are
provided by it which ultimately helps to gain competitive advantage with much ease.
(4.2) Evaluate impact of developing economies on UK
Emerging economies are termed as those economies which are on path of growth and
development by which developed nations have a great impact on their economies. BRICS has
several emerging economies which has great impact on UK. The nations under BRICS are
Brazil, Russia, India, China and South Africa. These nations provide goods and services at low
cost in order to gain market share. This negatively impacts UK as profits are reduced too much
extent as lower prices of commodities are sold by them (Fetterolf and Rudman, 2017).
In the current scenario, domestic and international conditions are in inverse direction and
not developing effectively (Archibugi, 2017). However, Co op food company is able to make
profits as they grow in accordance with the emerging economies. Developed nation like UK has
to make effective strategies so that developing economies may not ruin its market and also it may
not gain more market share. Thus, developing economies have a great impact on UK.
CONCLUSION
Hereby it can be concluded that organisation is impacted by the demand and needs of
customers. When demands are adequately met by it then it is said to be in equilibrium. The
policies of company must be in relation to the laws and rules which are enacted by the
government. Moreover, demand elasticity plays important role in analysing prices of goods. The
growth rate of UK is declined which led to decrease profits of the company. Further, the
monetary as well as fiscal policies also affects organisation adversely. In addition to this, impact
of BRICS also has adverse effect on economy of UK.
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REFERENCES
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medium-sized enterprises in a global economic recession? UK evidence on sales and
job dynamics. International Small Business Journal. 33(5). pp .488-513.
Disch, L., 2016. Representation. In The Oxford Handbook of Feminist Theory.
Ferri, F. and Maber, D. A., 2013. Say on pay votes and CEO compensation: Evidence from the
UK. Review of Finance.17(2). pp .527-563.
Galindo, M. Á. and Méndez, M. T., 2014. Entrepreneurship, economic growth, and innovation:
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Guerrero, M., Cunningham, J. A. and Urbano, D., 2015. Economic impact of entrepreneurial
universities’ activities: An exploratory study of the United Kingdom. Research
Policy. 44(3). pp .748-764.
Huggins, R. and Thompson, P., 2016. UK Competitiveness Index 2016.
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Lee, F. S., Pham, X. and Gu, G., 2013. The UK Research Assessment Exercise and the
narrowing of UK economics.Cambridge Journal of Economics. 37(4). pp .693-717.
Lottrup, L., Grahn, P. and Stigsdotter, U. K., 2013. Workplace greenery and perceived level of
stress: Benefits of access to a green outdoor environment at the
workplace. Landscape and Urban Planning. 110. pp .5-11.
Love, J. H. and Roper, S., 2015. SME innovation, exporting and growth: A review of existing
evidence. International Small Business Journal. 33(1). pp .28-48.
Kagel, J. H. and Roth, A. E. eds., 2016. The Handbook of Experimental Economics, Volume 2:
The Handbook of Experimental Economics. Princeton university press.
Atkinson, A. B. and Stiglitz, J. E., 2015. Lectures on public economics. Princeton University
Press.
Brue, S. L., McConnell, C. R. and Macpherson, D. A., 2016.Contemporary labor economics.
McGraw-Hill Education.
Fetterolf, J. C. and Rudman, L.A., 2017. Exposure to Sexual Economics Theory Promotes a
Hostile View of Heterosexual Relationships. Psychology of Women Quarterly. 41(1).
pp.77-88.
Archibugi, D., 2017. Blade Runner economics: Will innovation lead the economic
recovery?. Research Policy. 46(3). pp.535-543.
Online
United Kingdom GDP Grwoth Rate 2017 [Online] Available Through:
<https://tradingeconomics.com/united-kingdom/gdp-growth>
United Kingdom Inflation Rate 2017 [Online] Available Through:
<https://tradingeconomics.com/united-kingdom/inflation-cpi>
United Kingdom Unemployment Rate 2017 [Online] Available Through:
<https://tradingeconomics.com/united-kingdom/unemployment-rate>
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