Business Environment: An Overview of Demand, Supply, and Elasticity

This essay delves into the crucial aspects of the business environment, focusing on the principles of microeconomics, demand, and supply. It explains the law of demand and the various factors influencing it, such as price, income, and consumer preferences, alongside the concept of elasticity. The essay further discusses supply, the law of supply, and the factors affecting it, including production costs, government subsidies, and technology. It also addresses shifts in the supply curve due to changes in these factors. The analysis concludes that understanding demand and supply is fundamental to comprehending the dynamics of product and service flow in the market, supported by references to relevant academic research.

Business Environment

Table of contents
• Introduction
• Trampoline's profit Issues
• Concept of microeconomics
• Law of Demand
• Factors affecting demand
• Elasticity in demand
• Supply
• Law of Supply
• Factors affecting supply
• Change in supply curve
• Conclusion
• References

Introduction
Business environment refers to sum
total of all the factors external to the
venture and which greatly influence
the overall functioning of the
business. Economics is the branch of
study which ensures the production,
consumption & also the transfer of
wealth.

Trampoline's profit Issues
• According to BBC News, increasing
shipping cost of trampoline is causing the
rising price of the trampoline in United
Kingdom and it is being stated by one of
the game retailer. Outdoor Toys owner
named James Owen stated that there is the
signifiant change in the high shipping cost.

Concept of Micro economics
There is basically the two concept of
economics, demand and supply
which are ensuring the flow of goods
and services in the large market.
Demand refers to the desire of the
individual in order to purchase the
particular goods and services

Law of demand
Law of demand stated that there is inverse
relationship between the prices and the
quantity demand of the particular goods and
services.

Factors affecting demand
• Price of goods and services
• Income of the consumer
• Price of related goods
• Taste an preferences of the
customers
• Customer expectations

Elasticity in Demand
This is called as the change in the
demand curve due to change in the
various factors that influence the
shift in the entire demand to the
right or left due to change in the
various such as prices of goods

Supply
Supply refers to the fundamental aspects
which explains the available amount which
is available for the particular goods to its
buyer.

Law of supply
It have stated that there is the
positive relationship between the
prices and quantity supplied in the
large market. There is no such
change in the factors but some of
the aspects such as rising
production cost may implied in
increasing the overall sale of the
commodity

Factors affecting supply
• Costs of production
• Government Subsidies
• Technology
• Weather
• More firms

Change in Supply Curve
This refers to the shift in the supply curve
due to the change in the various aspects
that includes technology, production cost,
tax rates of the company. When the
supply of products rises then the supply
curve move to right from s0 to s1 and
decreases in the supply of the goods then
the supply curve shifts to left from s0 to
s2.