BM533 Contemporary Economic Analysis: Micro vs. Macro Theories

This essay provides a comprehensive analysis of microeconomic concepts within the context of a retail business, FamilyMart Ltd., focusing on demand and supply dynamics, market structure, and equilibrium points. It delves into the laws of demand and supply, examining factors that influence these aspects and illustrating their movements. Furthermore, the essay critically evaluates and contrasts emerging theories of contemporary business economics from the 20th and 21st centuries, connecting them with modern business practices, including the neoclassical and Keynesian theories, as well as the approaches of entrepreneurs like Jeff Bezos. The analysis aims to bridge theoretical understanding with practical applications in business management and strategy.

BM533 Contemporary
Economic Analysis

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Task-I Analyse the concept of microeconomics to any retail business. ....................................3
Task II. Critical evaluation and contrasting among the emerging theories of contemporary
business economics of 20th and 21st century and connect them with the modern business
practices.......................................................................................................................................9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Economics is the concept that is concerned with the human behaviour, their
understanding & decision making which is being faced difficulties or the successes. This is the
discipline which combine the history, polities with in the large economy(Schumpeter and
Heilbroner, 2022). Demand & supply are the major elements of business that ensures the flow of
commodities and services in the given market by which they can sustain in the large market for
longer time period. FamilyMart Ltd. Is the chosen organisation, it is the Japanese convenience
firms which is conducting their business in the market. This assessment will cover the overview
of the company, analyse the market structure and defines the concept of demand and supply with
its law. Moreover, it will cover the movement of demand and supply and also define the
equilibrium point. Lastly, this will critically evaluate and contrast the emerging theories of
contemporary business economics of 20th and 21st century in the advance business practices.
MAIN BODY
Task-I Analyse the concept of microeconomics to any retail business.
(a) Company Overview
The FamilyMart is the second largest convenience store which is operating in the hub of
Japan and owned by Aizawa Yuki and they are operating in hot snacks, coffee and frappé ,
beverages. They are approximately having the 24,574 stores in various location around the globe.
(b)Product Presentation
The Family Mart is offering various products which are offering sandwiches, these are
the premium sandwiches with soft bread and it has the stuffing of fresh delicious filling. They
offer bakery breads, it is the dazzling array which is cooked in the Japanese style bread (Feng
and et. al., 2021). They are also offering oden, it is the flavourful and savour and chosen from
two soups.
(c)Market Structure
It refers to how the various business are operating their business and differentiated on the
basis of various degrees and the nature of the business for services and goods. There are certain
types of market structure in which various business are operating. In context to FamilyMart, they
are operating in the monopolistic competition and it occur when the company is offering
products and services which are similar but not identical to each other. There is low barrier in

the entry ad th exit of firms as they are offering goods and new firs can enter in the market and
also can withdraw their business when they wish to. Monopolistic competition is majorly related
to the business strategy of the business differentiation.
(d)Law of Demand
It is law which says that there is the opposite connection in the given prices & the
quantity demand of certain products. When the prices of the commodity rise then its leads to
slow down the demand of respective goods in the given marketplace. In context to FamilyMart,
when they are offering goods at higher prices then the demand of goods tends to reduces as
individual always prefer affordable goods.
From the above given curve, it can be said that when the price of goods was at p3 then
the demand of goods also at q1 and rise in prices to p2 tends to reduce the demand from q2 to q1.
In such way, this is showing the opposite relationship in the prices ad the demand of given
commodities.
Factor affecting demand of given products:
 Price of particular products: There is inverse relationship in the prices & the demand of
the given commodities and it is being said that when the price of the products increase
then the demand of respective goods rends to fall-down.
 Variation in future expectations: It is estimated that when the consumer is expecting
any sort of change in the quantity of the given goods then they increase their purchase in
the current marketplace(Jianchao and Qing, 2018).

 Price of complementary products: these are the goods which is work as the conjunction
of another goods which is leading to have the higher consideration in the target market.
 Income of consumer: There is the positive relationship in the demand & the prices of the
given commodities in the market. When the income of the buyer increases then its leads
to rise the demand of commodities in the market.
(e)Law of Supply.
According to this law, there is the direct connection in the given prices & the quantity
demand of given goods in the market as it is known that supplier always sell their products only
on higher prices by which they can increase their sale and revenue and sustain in the market for
long period of time. In context to FamilyMart, When the prices of the goods increases then the
respective supply of commodities also rises in the market as this shows the direct connection in
the aspects of economics.
It is being derived from the above curve that when the price of goods tends to rise which
is leading to have the major consideration and implied in having higher supply of commodities in
the target market. When the price of goods was at p3 then the supply of commodities was at q3
and rise in prices to p2 implied rise in the supply of commodities to q2 respectively(Devine and
Ash, 2022).
There are various aspect that are influencing the supply of goods in the market and these
are explained below:

 Production cost: There is the direct link in the supply of commodities and its prices as
when the cost of production decreases then it leads to increase the supply of given
commodities in the target market.
 State of technology: When the company is using the updated version of the technology
then it leads to rise the supply of commodities in the target market & vice-versa.
 Government subsides: when the government is offering more subsidies to the local
people and the organisation then its leads to minis the overall cost of company by that
they can increase the supply of commodities in the market.
(f)Equilibrium Point
It is the point which represent the balance in the supply and demand of given goods as the
suppliers are meeting or fulfilling the needs and wants of the people at larger segment in order to
sustain in the marketplace. In considertion to FamilyMart, when the demand of goods is being
fulfilled by the company then they can maintain the pointy of equilibrium in the market.
(g)Movements of Demand and Supply
It is defined as the shift in the supply curve and demand curve that shows the different
market phenomena. It is due to the change in the prices & the quantity demand of commodities
from one point to another(Opeskin, 2021).
Change in demand curve
It is the state in which the demand curve will vary in position and shift to the right or to
left due to the impact of good sand services in the target market. In context to FamilyMart, shift
in the demand curve to the right from d0 to d2 leads to have increase in the demand curve to fall
in the prices and the favourable other aspects that is influencing the demand of commodities.

Change in supply curve
It is the situation in which the supply curve move to the right or left to the variation in the
different aspects involves the cost of production, state of technology, weather, number of firms
and so on. In considertion to FamilyMart, when the the supply curve shift from s0 to s1 then this
shows the rightward or increase in the supply of goods in the target market.
(h)Elasticity

It is the economic concept which basically measure the change in the aggregate demand
of the goods and services in context to its prices movement of that particular products and
services. A specific products is said to be elastic when the quantity demand of goods change
more then its prices. Basically there are five types of elasticity of demand which are given
below:
 ED= ∞, it is the situation in which the demand is perfectly elastic which means change in
the given prices leads to have change in the quantity demand which falls to zero.
 ED= 0, It is the situation in which the demand is perfectly inelatic which means there is
no change in the quantity demand with the change in its prices to any extent.
 ED= 1, it is the situation in which the demand is unitary in which change in the prices
leads to equal change in the quantity demand of goods in the market.
 ED>1, It is the situation in which the demand is elastic that means quantity demand
responds to the prices change in a greater proportion.
 ED<1, It is the situation in which the percentage change in prices will case a little change
in the quantity demand of given goods in the target market.
Task II. Critical evaluation and contrasting among the emerging theories of contemporary
business economics of 20th and 21st century and connect them with the modern
business practices.
Contemporary economics is s the study of advance theoretical along with the effective
research so that the economist understand the management, accounting, finance and economics
in order to manage the various business operations at its best and also promote to develop the
discipline in an organisation(Reisman, 2018). When taking the consideration of FamilyMart,
manager and the employees are understanding the certain emerging theories with the advance
business application. In relation to 20th ans 21st century, contemporary economic theories are
given below:
From the 20th century
Neoclassical theory: This particular theory is being launch on the basis of book
published by Menger, Leon Walras and Stanley Jevons. The main emphasis of this respective
theory is the ensure the demand and supply of goods in a appropriate direction as it is known that
the driving forces which are contributing and ensuring the production, prices of the commodity
and its consumption. In relation to FamilyMart, this theory help in understanding the taste and

preferences of the customer so that they can better serve them in a appropriate manner in order to
full-fill their needs and wants in the given market segment. They also analyse the deviation in the
current consumption and the desired one in order to full-fill the gap. This basically work with the
sole assumption that the individual are having sole aim to ensures the higher utility and
consumption with the major focus of increasing its profitability. There are force feature of this
theory which are methodological, individualism, rationality, equilibrium and the significance of
the given prices in the market.
Keynesian Economics theory: It is being said that economics do not have the stable
behaviour as they quickly receive effective intervention that increase short-term demand within
the economy, there are certain aspects that wages & employment are are slower respond to the
needs of the people & the market which is required government interventions to stay on the right
track. This theory focuses on the demand-side solution of the given period so that they can offer
the better services to their prospective customer. Moreover, they have argued that prices do not
respond quickly & change according to the monetary policy interventions are being made and
leading to giving increase to the branch of the Keynesian economics. In context to FamilyMart,
application of this theory helps the company(Langevoort, 2022). This is the main consideration
of the venture that is leading to the huge growth and profitability within the business
organisation in the target marketplace.
From the 21st century
Jeff Bezos: He is the CEO and President of Amazon.com, they focuses on making
feature and services perfect so that this can add value to the customer experience. Jeff Bezos is
working for minimising the prices and enhance the delivery s that they can continuously working
on adding new products into their everyday services. The main focus of the Jeff Bezos is to act
upon the risk as there is the side of the risk which can take to the progress or can leads to have
failure so people must have the direct emphasis on the overall changing business environment.
They keep on experimenting with the new things so that they can have the new working with
innovative ideas in their given job role. They basically think long term goals and frame the
strategic in order to achieve them in an appropriate manner.
Paul Krugman: He is the Neo-Keynesian economist and also known for its work on the
international trade theory. Considering as the world's most influential economists and they are
known for the renowned for defining the existing theories which is related to the international

trade from the new trade theory(NTT). In 1979, Krugman wrote the paper that helped them to
earned the 2008 Nobel Prize in economic sciences for launching an entirely new theory which is
related to the international trade.
CONCLUSION
This is being summarised from the above report that economics is have the significance
role in ensuring the better functioning within the organisation this is the major consideration
which is ensuring to have the more market growth. Demand & supply are the vital concept which
helps in the easy flow of commodities & services in the target market. There are aspects which
impact the demand of particular commodity which are prices of commodity, income of
consumer, future expectation of buyer and so on. Furthermore, there are factors which impact the
supply of products in the market which are cost of production, technology used and many more,
change in demand and supply are get affects from above discussed factors. This respective
company is operating their business in monopolistic market as there are few big firms who are
operating in retail industry. There are various the prices which s being used in 20th ans 21st
century in order to use in the advance business practices such as Neoclassical theory, Keynesian
Economics theory and Paul Krugman, Jeff Bezos which are contributing to the development of
the business.

REFERENCES
Books and Journals
Langevoort, D.C., 2022. Global Behavioral Compliance. In Corporate Compliance on a Global
Scale (pp. 217-236). Springer, Cham.
Reisman, D., 2018. Demand Management. In James Edward Meade (pp. 147-165). Palgrave
Macmillan, Cham.
Opeskin, B., 2021. Rationing Justice: Tempering Demand for Courts in the Managerialist
State. University of New South Wales Law Journal, Forthcoming.
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.
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.
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.
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.
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.