BM533 Contemporary Economic Analysis: Economic Theories and Business

This report provides a comprehensive analysis of contemporary economic principles, focusing on demand and supply dynamics with real-world examples from FamilyMart. It explains the laws of demand and supply, detailing movements along the curves and shifts in the curves due to various influencing factors. The report further compares and contrasts economic theories and models from the 20th and 21st centuries, highlighting their relevance to modern business practices. By examining both traditional and emerging economic perspectives, the analysis offers insights into how businesses can adapt and thrive in a changing economic landscape. Desklib is a platform where students can find similar solved assignments and study tools.

BM533
Contemporary
Economic Analysis

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
1.1 Explain the law of demand, movement along with the demand curve and change in the
demand curve with the help of appropriate diagram...................................................................3
1.2 Explain the law of supply, movement along with the supply curve and also explain change
in supply curve with suitable diagram........................................................................................6
TASK 2............................................................................................................................................9
Compare & contrast emerging theories & models in 21st century contemporary economics
with those of the 20th century, and relate both of these to advance business practices..............9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Economics is the analysis of people & explain what drives the human behaviour,
decisions-making ad the reactions when they are going through any sort of change or the
emerging issues. Economics is the discipline that combine the politics, psychology with in the
economy. There are two main components of economics which are demand and supply that
ensures the flow of goods and services in an appropriate manner (Reisman, 2018). The
FamilyMart Company, Ltd. Is the Japanese convenience store & it is the second largest
convenience store chain. They are having almost 24, 574 stores in different part of the world.
This respective report will cover the law of demand and its movement along with the demand
curve & also consider the law of supply curve ad the facing affecting change in the supply curve,
Lastly, It will cover the two emerging theories or model of 21st century an contemporary
economics and 20th century theories with its comparison among them.
TASK 1
1.1 Analyse the law of demand, movement along the demand curve and variation in the demand
curve by using appropriate diagram.
Demand is the concept of which illustrate the desire of the consumer to purchase the
particular goods & services and also having the capacity to pay fr the given prices of
commodities.
Law of Demand:
It is defined as the states that there is the inverse relation in the prices & the quantity
demanded in the target market(Jianchao and Qing, 2018). There is no such variation in the
various factors as there are remain constant. When the given price of commodity rises form p0-
p1, it reflects in down-fall in the demand of the good and the demand decreases from oq0 to oq1.
The prices of the given goods and inversely related to its quantity. In context to FamilyMart,
when the price of such products rises then the demand for the same also decreases.

From the above given diagram, It can be said that the demand curve is downward sloping
as when the given prices of goods rises from p3-p2 then the demand for various commodities
fall-down & the demand comes from q2 to q1. Whereas, given prices of commodities downfall
from p2-p3 then the demand for products rises from q1-q2.
Factors which are affecting the demand of the particular good are as follows:
 Price of the products: It says that the prices of the commodity increases then he
demand for the goods tends to reduce and when the prices for goods and services reduces
then the demand for such commodities tends to increases as individual love to buy the
commodities who are cost effective.
 Price of substitutes commodities: These are the commodities which can be replaced by
other goods and as per the law of demand, when the price of substitute goods increases
then the demand for own goods tends to rise and people can buy the FamilyMart products
in affordable goods.
 Price of compliments goods: These are the goods that is used as the helping hand for the
other commodity and it is said that the when the given prices of complement goods rises
then the demand for the own products fall-down as the prices of the FamilyMart goods
also increases.

 Income of the consumer: It says that that when the disposable income of the buyer rises
then the respective demand for normal commodities tends to rise. Whereas the demand
for inferior gods decreases as the effective purchasing power tends to buy the premium or
normal goods to them(Martek, 2022). In context to FamilyMart groceries, Rise in the
income level tends to rise the entire demand of goods and services in the target market.
 Taste and preferences of the consumer: Individual are having integrated demand of
goods in the market with the changing trends. In context to FamilyMart, when the buyer
are having the favourable choices to the brand then the demand or their goods and
services tends to rise in the target market.
 Change in future expectations: These are the factors which are having direct relation to
the supply of goods. In context to FamilyMart, when the people are expecting the change
in the prices of goods in near future then the demand for goods tends to increase in the
target market and vice-versa.
Change in demand curve:
It is basically refers to the shift in the curve due to variation in the certain aspects that is
impacting the overall demand of goods & s services in the target market. These factors includes
the variation in the prices, income of buyer, taste and choices of customer & the prices of goods.
In such cases the demand curve will shift to left or right.

Change in entire demand curve defined as the variation in the entire demand curve can
shift to thee right and it is because when there is rise in the curve then the curve will move to he
right. In context to FamilyMart, the initial demand is D0 then the demand curve can shift to D2
or D1. It can be due to the variation in the income, price of commodities, variation in future
expectations and so on.
1.2 Analyse the law of supply, movement along the supply curve and also access change in
supply curve with the use of diagram
Supply is defined as the concept that explains the overall available amount for particular
goods and services to its customers. Further it can defined as the available amount of goods at
given prices that are given in the graph.
Law of supply:
AS per the law of supply, There is the direct connection in the quantity supplied and the
given prices of the commodity. When the prices of commodities tends to increase then the
supplier increases its supply in the target marker with the aim of generating more revenue as
well(Langevoort, 2022). On other hand, when the prices of goods and services tends to decreases
in the target market then the supply of given commodities also decreases as supplier do not sell
its products in loose. In context to FamilyMart, when the given prices of the commodities and
services tends to increases then the respective supply of goods and services also increases and
vice-versa.

From the above curve, it can be said that the supply curve is slopping upward which
shows the positive connection in quantity supply & the prices of the commodity. As in the given
diagram, it is shown that when the given prices was at p3 then the supplier were offering supply
which is q3 but increase in the prices of goods to p2 then the supply of commodities also
increases to q2 in the market which also the FamilyMart to generate more revenue.
Factors which are affecting the supply of the particular commodites are as follows:
 Production cost : An organisation can offer any of the quantity of its goods and services
when they are having the sufficient factor of production that includes the raw material
and the employees to operate the task in an appropriate manner. Sufficient availability of
goods and services tends to rise the overall supply of goods in the market and vice-versa.
In consideration to FamilyMart, when the company do not have the sufficient raw
material then the supply of goods and services tends to fall-down in the target market.
 Technology: These are the advancement and the innovation meant by the supplier in
order to increase its overall sale. In context to FamilyMart, when the company is using
upgraded machine and methods in its production, it leads to rise the overall supply of
goods and services in the target market.
 Government Subsidies: These are the benefits given by the government bodies and in
context to supply, when, there is the increase in the subsidies then it leads to minimise the
cost of goods and the supplier will supply more of its products with the aim of generating
goods revenue(Devine and Ash, 2022). For example, decreases in the tax rate of Japan
can rise the overall supply of goods in the market.
 Weather: These are the aspects which is having the direct infleuce on the overall
functionality of the business. As the FamilyMart is operating in food products as well
then it hurdle the overall supply of goods when then weather is not favourable in the
market.
 Objectives of firms: There are basically two type of firm that are profit oriented or
voluntary firms. When the company try to rise its profits then the reduce the supply when
the prices of goods is not so high as their main consideration to increase it revenue and
profitability.
 More firms:Large number of competitors impact the overall supply of goods and
services in the target market. In context to FamilyMart, Rise in the number of

competitors can reduce the supply of goods and services. Where as reduction in the
number of firms tends to rise the supply of products in the large market.
Change in Supply Curve:
It is refers as the shift in the supply curve due to variation in the certain aspects that
includes the taxes, production cost, technology etc.(Feng and et. al., 2021). It is also clear that
the when the supply of commodites increases then the supply commodity rises then the supply
curve will shift from s0-s1. Whereas, reduction in the supply curve tends to shift the supply
curve from s0-s2.
The above supply curve shows that the increase in the prices of commodities and services
tends to rise the overall prices of products tends to increase the supply of FamilyMart and the
supply curve will shift from s0 to s1 and reduction in the prices of products tends to decreases
the supply of goods in the target market.
TASK 2
Compare & contrast leading theories & models in 21st century contemporary economics and 20th
century, and relate both of these to advance practices of venture.
Contemporary economics includes the various theoretical with the better research of
certain fields of economic, management and accounting that has the signifiant influence to
develop the disciplines. In context to FamilyMart, They further has to overlook the overall

productivity & also having the vital concern to the target market which are emerging in the 20th
& 21st century that are explained as follows:
Traditional Economic Theories
Neoclassical theory:It is being introduced by the Carl Menger and Leon walras. They
basically concern on the demand & supply that are the drivers to operate the flow of goods and
services in the economy and also help the better organisational services by which they can make
the better use of goods and services. In context to FamilyMart, people are having changing taste
and preferences which is making variation in the demand of goods and services of current
consumption as the people are consumption goods and services and consideration to the overall
business model.
Keynesian Economics theory: It is the theory which is related to the employees who are
operatins of the employees on the consideration that the wages & the prices of commodities are
fixed and the workers are dedicated to the work and focus by which they can ensures the
effective working in the company by which the overall profitability ad revenue of the company is
being impacted. It is concern with the macroeconomics & involves the reduction in relation to
the consumption and the purchasing power of the people. As the other factors are related to the
given prices & the wages that is having the main impact in the market & also reflect the overall
profitability of an organisation.
Contemporary Economic Theories
Behavioural theory: The theory is being launch by Richard Thaler & having the
effective combination of psychology & he economic environment by that they can analyse the
reasons for have good behaviour given by the indidivual who are living in the real
world(Achiume and Lake, 2022). In relation to FamilyMart, they effectively analyse and
understand the behaviour of the workers as they are helpful for effective communication. In the
time of global pandemic, this theory is generally based and introduced by the individual who is
having the main aim of get more revenue by reudcing the entire cost that is being sent on big
data.
Nudge theory: It is the economical concept which is having indirect suggestions with the
better enforcement so that they can understand the behaviour of the people for having the goods
decision-making. In relation to FamilyMart, This respective analysis helps and this can be used
in order to understand the business environment by which they can have the automatic cognitive

process for the effective decisions making. During the global pandemic, they can access the
effective use of theories so that they can rightly use the individual with their more concern its
financial consideration in order to ensures the effective decision-making of the people.
CONCLUSION
It is summarised from the given report that demand & supply are the components that
ensures the better flow of goods and services in the economy. There are factors which is
influencing the demand of goofs and services in the market that are price of commodity, income
of consumer, taste and preferences and future expectations. Quantity demanded and the given
prices of goods have the inverse relationship in the market. In context to supply, there is direct
relationship in the given prices of commodities and the quantity supplied in the target market.
There are various factors which impact the supply of commodities are cost of production,
technology used, type of firms, number of competitors. Neoclassical theory, Keynesian
Economics theory, Behavioural theory and Nudge theory are used by the company so that they
can ensures the better development to the economy.

REFERENCES
Books and Journals
Achiume, E.T. and Lake, D., 2022. International Convention on the Elimination of All Forms of
Racial Discrimination (ICERD). In Elgar Encyclopedia of Human Rights. Edward Elgar
Publishing Limited.
Feng, G. and et. al., 2021, March. Research on the Demand Distribution of Aviation Equipment
Maintenance Spare Parts. In 2021 IEEE 6th International Conference on Big Data
Analytics (ICBDA) (pp. 301-304). IEEE.
Devine, P.G. and Ash, T.L., 2022. Diversity training goals, limitations, and promise: a review of
the multidisciplinary literature. Annual review of psychology, 73.
Langevoort, D.C., 2022. Global Behavioral Compliance. In Corporate Compliance on a Global
Scale (pp. 217-236). Springer, Cham.
Martek, I., 2022. International Construction Management: How the Global Industry Reshapes
the World.
Schumpeter, J. and Heilbroner, R., 2022. The Creative Destruction of Socialism. The Making of
Modern Economics: The Lives and Ideas of the Great Thinkers, p.421.
Jianchao, R.E.N. and Qing, H.A.N., 2018. Reason Analysis for Difference Between Consumer
Food Safety Risk Perception and Real Situation: From Information Supply and Demand
Perspective. Journal of Beijing University of Aeronautics and Astronautics Social
Sciences Edition, 31(4), p.75.
Reisman, D., 2018. Demand Management. In James Edward Meade (pp. 147-165). Palgrave
Macmillan, Cham.
Shapiro, D.B., 2018. Payment to egg donors is the best way to ensure supply meets demand. Best
Practice & Research Clinical Obstetrics & Gynaecology, 53, pp.73-84.
Opeskin, B., 2021. Rationing Justice: Tempering Demand for Courts in the Managerialist
State. University of New South Wales Law Journal, Forthcoming.