BM533 Contemporary Economic Analysis: Demand & Supply at FamilyMart

This report provides a comprehensive microeconomic analysis of FamilyMart, a Japanese convenience store chain. It covers the company's overview, product presentation, market structure, and equilibrium point. The report explains the laws of demand and supply, including movements along the curves and shifts due to various factors, illustrated with diagrams. It also evaluates emerging and traditional economic theories, comparing and contrasting them in the context of modern business practices at FamilyMart, highlighting the impact of changing consumer preferences and purchasing power on the company's operations. This assignment solution will be published on Desklib, a platform providing AI-based study tools for students.

Contemporary
Economic Analysis

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Analyse and evaluate the concept of microeconomics to retail business of given
organisation...........................................................................................................................3
Explain and examine the law of Demand, movement along the same demand curve (with
the help of table and diagram) and changes in demand curve with affecting factors (with
the help of diagram).............................................................................................................5
Explain the law of Supply, movement along the same supply curve (with the help of
diagram) and changes in supply curve with impacting factors (with the help of diagram).
................................................................................................................................................6
Task 2...............................................................................................................................................8
Evaluate two emerging theories or models of 21st century on contemporary economics
of your choice and two 20th century theories or models of your choice. You have to
compare and contrast both to modern business practices...............................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

FeedbackINTRODUCTION
The term economics can be defined as the framework in the context of the human
behaviour , their reactions and the power of decision making that causes difficulties in the
success. This is the sector that merge the history and the politics in the global scale economy.
The concepts of the demand and supply are the major components which makes sure the
effective flow of the goods and services in the targeted market so that they can stand in the
market for a longer period of the time . The organisation that has been chosen in this report is
FamilyMart Ltd. This is the Japanese convenience firm which is conducting their
business(Becchetti, Bruni and Zamagni, 2019) . The aim of this report will cover the overview
of the company, analysation of the market structure and the concept the law of demand and the
supply in the market. Apart from this , it will cover the movement of demand and supply with
the evaluation of the equilibrium point . At last this report will critically analyse and examine the
contract of the emerging theories of the contemporary business economics from the current
market conditions and its advance business practices.
TASK 1
Analyse and evaluate the concept of microeconomics to retail business of given
organisation.
(a) Company Overview
The FamilyMart is the second largest convenience store which is doing its operations in
the Japan , the company is owned by Aizawa Yuki and they are selling includes hot snacks,
coffee and frappe beverages. They are having the 24,574 stores in multiple locations around the
globe.
(b) Product presentation
The stores of the FamilyMart is offering different products which includes premium
sandwiches with the soft breads with the stuffing of fresh and tasty filling. With that they offer
bakery breads which is cooked by following the traditional recipe of Japanese style bread
(Besanko and Braeutigam, 2020) . They are also offering the oden, it is the flavourful and the
savour and chosen from the two varieties of the soups.
(c) Market structure

It is defined as how different business operating their business working based on the
multiple degrees and the basic nature of the business for various services and the goods . There
are different types of the marketing structure on the context of which various businesses
operating. In the context to FamilyMart, they are operating their functions in the monopolistic
business competition and it arises when the company is offering different goods and services
which provide similar features but not identical with each other (Boustani, 2020) . The chances
of entry of an another competitors is very low and as far as the concern of the new entry in the
market in order to offer goods and services can make entry and exit from the business as per their
wish.
(d) Equilibrium point
It is the point which make balance between the supply and the demand of the goods as the
suppliers are meeting with their requirements through the people of the largest segment in order
to stand in the market. In the context of FamilyMart , when the demand of the goods are being
completed by the particular company then they can maintain the point of equilibrium in the
market.
(e) Law of Demand
It imply that the quantity that a buyer purchased changes inversely with its price. It
concludes that the higher the price of the product the lower is the demand of that particular
products. It happens because of the diminishing marginal utility as the consumer used first units
to serve the urgent needs only.
(f) Law of supply

It is the framework that all the component being equal and remain constant , as the prices of
the goods and services make increment, the quantity of the goods and services that offered by the
suppliers are also increases and vice versa.
Explain and examine the law of Demand, movement along the same demand curve (with
the help of table and diagram) and changes in demand curve with affecting factors
(with the help of diagram).
(d) Law of demand
It states that there is opposite relationship in the given prices and the quantity that is
demanded of a particular goods. When the cost of a particular goods increases which as the
result leads to slow down the demand of that particular goods in the targeted market (Buechner,
2018) . In respect to the FamilyMart , when they are selling their goods in the higher prices to
the customer then the respective demand of that goods which tend to make reduction as the
people who prefer affordable goods.
From the above given diagram, It can be interpret that when the prices of the goods
was at the p3 then the demand of that good also at q1 and increment in the price to p2 which
reduces the demand from q2 to q1. In such way, this is implementing the inverse relationship in
the price and the demand of the given goods.
Factors affecting demand of given products:

 Price of particular commodity- There is a clear connection between the price of the
commodity and the demand . Higher prices creates lower demand and the lower price
creates higher demand . This is because the satisfaction levels of the buyers.
 Variations in future expectations- Another reason of anticipating demands can be by
the understanding the consumer expectations. With the changing fashion trends and the
technological advancement brings the different changes in the taste of the customer.
 Price of complementary products- The price of that good depends on the product and
services that adds the value to another goods. So if the demand of the complementary
good is higher then the demand of good automatically rises.
 Income of consumer - The more the income a consumer generate , the higher they spend
on purchasing goods and they spend their income on high quality products. and inverse
happen , the lower the income of the consumer, the low amount of purchasing power a
consumer have. Purchasing depends on the earning capability of a customer .
 Preferences of buyer- Consumer buys what they see or influence the most. Their
preference depends on the current trends being followed in the present time. Some of the
reason the consumer may be personal while others depends on the market. The demand
of the good affected by the preferences of the consumer as if consumer want a particular
good , they will buy it whether the price of that good is higher or lower.
Make evaluation of the law of Supply, movement along the same supply curve (with the
help of diagram) and changes in supply curve with impacting factors (with the help
of diagram).
(e) Law of supply
According to this law, there is direct relationship in the prices that are give of the productsa
and the quantity that is demanded of the given goods in the market as it is imply that supplier
always sell their products on the higher prices through which they make increase their sale and
profit hat makes them sustain in the market for the longer period of time(Considine, 2018). In

the context of FamilyMart , when the cost of the products enhances then the supply of the goods
also changes and increases in the market as this show the direct aspects of economics.
It is derived from the above diagram that when the price of the goods rises which is
having major consideration and implies in having higher supply of goods on the market. When
the prices of the good was at p3 then the supply of that goods was at q3 and rises the prices to p2
which implies the increment in the supply of commodities to q2 respectively.
There are multiple aspect that are making impact on the supply of goods in the market
and these are given below:
 Cost of production- The supply of the good decreases if there is increment in the of
the cost of production and vice versa. The supply of the goods and the cost of production
are related inversly to each other (Kleiner and Karpinskaya, 2019). The cost of the
production will depends on the wages of the labour, natural calamities such as crop
failure , increment in the price of transportation , tax increment and many more.
 Technology used- A advanced technology increase the production of good, which as
overall increase the supply of that particular goods in the market. This increases the sales
for a business.
 Government subsides- The supply of the goods also depends on the different policies of
the government such as fiscal policy and other policies and law that largely impact on the
supply of goods. And with the taxation policy , there is a serious effect on the supply of

the product . As when there is a increment in the taxes , the profit perimeter of the
product reduces and as a result supply reduces.
 Objective of the firms- The future goals of the organisations and the objectives of
production also depends on the supply of the products as there is various factors such as
production capacity, nature of business and many other.
Task 2
Evaluate two emerging theories or models of 21st century on contemporary economics
of your choice and two 20th century theories or models of your choice. You have to
compare and contrast both to modern business practices.
The contemporary economics deals and helps with the aspects that are theoretical based and
from the most important fields of the economics such as management and the accounting sector
that makes impact in the economics sector (Malindretos and Tsanacas, 2019) . In context of the
FamilyMart , there is an essential need of analysation of the company's overall productivity with
the focus and concentration in the targeted market in context to the theories of 20th and 21st
century, explained by this manner given below:
TRADITIONAL ECONOMICAL THEORIES
Neoclassical theory
This theory was explained by Carl Mengar and Leon Walrus. The most important aspects
are the demand and the supply which are the prime keys in smooth operations flow in terms of
product and services in an economy. By this, an organisation can definitely make potential use
of the available resources in the market. In the context of FamilyMart, the needs, wants and the
preferences of the consumer keeps on regular changing which directly make impact on the
demand component in the market (Ming, 2022) . The consumer rely on the latest trends that
currently trending and makes impact on the key driver in an economy.
Keynesian theory
This theory is based on the operations which implements that the wages and the prices of
the goods kept fixed and the workers that are employed by the organisations have their total
focus on their jobs. This makes implementations an effective flow of work in the company. It
thus make sure that an increment in the profitability ratio forms a major impact in the revenue
creation of an enterprise (Stepanenko and Stepanenko, 2018) . In the context of FamilyMart ,

they are effected with the purchasing power of the customer which can increase or decrease their
level of consumption depends on the rates that are designed to each job role.
COMTEMPORARY ECONOMICS
Behavioural theory
Richard Thaler has introduced this theory. He states that with the implementation of an
effective corelation of both psychology as well as economic environment , an explanation can be
formed by the understanding of an individual behaviour being in the real world. In context of the
FamilyMart , they have effectively carried out the merger of understanding the nature of their
workforce by the establishment of the effective channel of communication among them.
Pandemic has made the associates realise the major impacts of this postulate. This approach has
helped and made its impact by providing help in the creation of profits in a positive manner.
Nudge theory
Its an economic concept that have the indirect co-relation with the considered enforcement
in order to understand the concept in a better prospects that majorly makes impact in the
decision making process. In context of familyMart, they can make potential use of this approach
to understand it more properly the business environment in a detail manner which helps in
maintaining a similar theme for an effective decision making component (Tang, Law and Harun,
2022). In the pandemic period of time , the company has utilise this theory in such a prospects
that they can fully utilise the capabilities and abilities of an individual with the focus on
financial aspects in terms to make sure the proper working and in the organisation.
CONCLUSION
From the above report it is analysed that both the demand and supply are being responsible
for an effective generation of the resources in an economy . They are the components that make
impact on the price of the commodity directly or indirectly, income generation of the consumer ,
purchasing power of the consumer, choices and preferences and the and the changes that made
impact on the future prospects. There is an opposite relationship between the quantity that is
demanded and the price of that commodity in the market. In respect of law of supply , there is
direct relationship between the quantity that is supplied and the respective prices in the market.
There are various factors that affects the supply side of the commodity that includes cost of the
production, the rivalry that exists and number of firms and technology used,. The theories that

discussed helps a organisation to make sure that the vision of the organisation is clear and the
procedure that happens in accordance with the the development in the economy. The theories are
traditional economic theory and the contemporary economics theory. Traditional theory includes
Neoclassical theory and the Keynesian theory. And the contemporary economics includes
Behavioural theory and nudge theory.

REFERENCES
Books and Journal
Becchetti, L., Bruni, L. and Zamagni, S., 2019. The microeconomics of wellbeing and
sustainability: Recasting the economic process. Academic Press.
Besanko, D. and Braeutigam, R., 2020. Microeconomics. John Wiley & Sons.
Boustani, N.M., 2020. Traditional Banks and Fintech: Survival, Future and Threats. In ICT for
an Inclusive World (pp. 345-359). Springer, Cham.
Buechner, M.N., 2018. A comment on the law of supply and demand. Journal of Philosophical
Economics, 11(2), pp.67-80.
Considine, T.J., 2018. Estimating concave substitution possibilities with non-stationary data
using the dynamic linear logit demand model. Economic Modelling, 72, pp.22-30.
Kleiner, G.B. and Karpinskaya, V.A., 2019, September. Transition of firms from the traditional
to ecosystem form of business: The factor of transaction costs. In Competitive Russia: foresight
model of economic and legal development in the digital age. International scientific conference
in memory of Oleg Inshakov (pp. 3-14). Springer, Cham.
Malindretos, J. and Tsanacas, D., 2019. A Policy Orientation of the Criticisms of the Traditional
Theory of International Finance in the Context of Fixed Exchange Rates,“. Quantity and Quality
in Economic Research: Studies in Applied Business Research, 4.
Ming, X., 2022. The Economic Value of Henan Traditional Culture and Art
Industry. International Journal of Social Science and Education Research, 5(2), pp.576-583.
Stepanenko, N.O. and Stepanenko, V.O., 2018. Macro-and Microeconomics: syllabus for
Bachelor's (first) degree students of specialities 291" International Relations, Public Communi-
cations and Regional Studios" and 292" International Economic Rela¬ tions".
Tang, C.F., Law, S.H. and Harun, M., 2022. Demand for inbound educational tourism: a note on
relative differences and non-linear relationships. Current Issues in Tourism, pp.1-6.