Business Economics: Demand-Supply, Theories, and Modern Practices

This report provides an analysis of contemporary business economics, focusing on demand and supply principles with Burger King as a case study. It explains the law of demand, including movements along the demand curve and shifts in the demand curve, as well as the law of supply and changes in the supply curve. The report also compares and contrasts emerging economic theories and models of the 21st century with those of the 20th century, relating these theories to modern business practices. Key factors affecting demand and supply, such as the price of commodities, substitute goods, consumer income, and technology, are discussed. The neoclassical growth theory is also examined, providing a comprehensive overview of the economic factors influencing business operations. Desklib offers a range of study tools and solved assignments for students.

Contemporary Business
Economics

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
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. 1
1.2 Explain the law of supply, movement along with the supply curve and also explain change
in supply curve with suitable diagram. 4
TASK 2............................................................................................................................................7
Compare and contrast emerging theories and models in 21st century contemporary economics
with those of the 20th century, and relate both of these to modern business practices. 7
CONCLUSION ...............................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Economics is the study of the individual and their certain values in the effective
production, distribution and the consumption of the certain products and services. This is majorly
focuses on the behaviour of economist and their different working style. There are various
aspects that reflect the demand in the target market and includes demand, supply, change in
demand & change in supply. This respective report is based on the Burger King, it is the
multinational organisation of hamburger fast food restaurants. The headquarter is in Miami-Dade
Country, Florida. This report will analyse the law of demand and also the movement along with
law of demand in the particular business. Lastly, it will analyse the certain theories & models
that are emerging in 21st century of contemporary economics.
TASK 1
1.1 Define the law of demand and movement with the demand curve & change in the demand
curve with the help of particular diagram.
Demand is defined as the desire of the consumer so that they can buy the particular
products and services backed with their sufficient purchasing power. This can be vary as per the
change in prices due to certain factors.
Law of Demand:
As per this law, there is the inverse relationship between the prices & the demand of the
given products as increase in the prices of goods and services implied in decrease the overall
demand of particular goods and services and vice-versa. All the factors remains constant. When
the prices of the given goods rise from P0 to P1 then the demand of the goods fall from OQ0 to
OQ1 and vice-versa. It shows the positive relationship in the price of the given goods and the
demand in the target market. In context to Burger King, when the prices of the burger rises then
the demand for such goods decreases as the nominal buyer will buy the affordable food products.

In the given graph, the demand curve is sloping downward due to inverse relationship
between the prices & the demand of given products. When the price of the products increases
from prices p3- p2 then the demand of their burger fall down from q3-q2 & can be more to q3 as
well. Whereas, as the prices of the goods decreases from p2 to p3 then the demand for such
commodities increases from q2 to q3.
Factors that are affecting demand of the particular good are as follows:
 Price of the commodity: Increase in the prices of commodities implied in decrease in the
overall demand of the goods in the target market. Where as decrease in the prices of
products and services implied in increase in the quantity demand of burger of Burger
King as the customer will buy affordable commodities for their consumption.
 Price of substitutes goods: These are the products that are having positive relationship
in the prices and the demand of such goods. As the substitute products for burger king is
burger of MacDonald's so when the given price of substitute goods increases then the
demand for current goods also rises as the customer will buy affordable food items or the
goods which is available at lower prices.
 Price of compliments products: these are the commodities which can be combine used
with the other goods and there is inverse relationship in the prices and the demand of the
such products. Sauce is the complementary commodities for burger and if the prices of

sauces rises then the demand for burger decreases as it leads to increase overall cost of
burger in the market and consumer will shift to their food items which are available at
minimum prices.
 Income of the consumer: It is related to the income of the buyer as it implied as the rise
in the income of the consumer implied the change in the demand for certain goods. When
the income of the buyer increases then the the demand for burger also rises as they can
buy the burger backed with their sufficient income level.
 Taste & preferences of the buyer: When the taste and preferences of the customer are
in favour of the given products then this will implied in rises the overall demand of the
particular products & services. When the people are not liking the burger then the
demand of burger to decreases
 Change in future expectations: This is basically related to the future availability of
products and services in the market. When the customer is expecting higher prices of the
goods in future then the demand for such goods increases. This is directly impact the
overall functionality of the business due to change in the demand and the overall prices.
Change in demand curve:
It is defined as the Variation in the overall demand curve that can be commonly caused
by various factors which includes the taste and preferences of their customer, change in income
level, prices of substitute goods and many more. In these case the demand curve tends to shift to
the right or life.

Change in the demand curve implied in change in the demand cure and it will move to
the right when there is fall down in the prices of goods and services make rise in overall demand.
On other hand, there is reduction in the demand of the particular commodity. In this diagram, the
basic demand is D0 which shift to D1 or D2 due to change in the various aspects that includes
the taste & preferences, income of the consumer, prices of complementary & substitute goods.
1.2 Explain the law of supply and the supply curve and also describe the change in supply curve
with particular diagram.
Supply is the major concept that implied in the total specific amount for the particular
commodity foe their customer. It is related to the amount of the goods at the specific prices in the
range of amount as per shown in the supply curve.
Law of supply:
According to this law, It is shown that there is the Positive relationship in the Given
quantity and the price of the commodity And other factors remain constant. It shows that When
the price of the given products increases then the supply of the goods also rises on other hand
when the price of commodity faults down then the supplier will not Send the product In the
market for further sale. In contacts to Burger King When the prices of burger increases then the
company will sale more burger and if the price of burger decreases then they supply less.

According to this law, this is given that supply curve is sloping downward As this is
showing the positive relationship in the supply of given products and their prices. As per the
given diagram when the prices of commodity decreases from q2 to q1 and this results in
decreases in the overall prices of the commodity. There are various aspects Which is showing
positive relationship in the supply and the prices of given products In the large market.
Factors that are affecting supply of the particular products are as follows:
• Costs of production: There are various aspects that is basically related to the cost of
given goods And when the given prices of labor raw material & other factory cost tends
to increase then the overall supply of the community decreases in the target market.
Whereas, the given prices of the factor of production tends to reduce the supply of
burger rises by which the suppliers can have more revenue.
• Government Subsidies: These are the benefits which is being provided by the
government over the prices of the commodity and it is shown that increases or decrease
in the government subsidies reflect the overall price of the given product. This also helps
in improving the oral functionality of the venture and rises in the prices of subsidiaries
tends to increase the overall prices of given goods.
• Technology: It is defines as the advancement & the innovation by that an organization
can reach to the heights and generate higher profits with the use of innovative
technology. It is the major concern of the business by which they can have the better
approach in offering certain goods and services in the large market. enhancement in the
technology help in improving the overall supply of the given products in the target
market.
• Objectives of firms: There are different types of ventures that are emphasizing on
welfare of the society & some of them the move them are meant to generate higher
profitability So can they can sustain the competitive market. Burger King is emphasizing
on the product by selling them more with the aim of having higher profits.
• Weather: These are the factors which focuses on the supply of certain product & there is
having major impact on the commodity in the large market. In relationship to
Agriculture industry, there is huge impact in the industry as they are dealing in

perishable goods. Burger king is operating their venture in food relating that commonly
effects overall functionality of venture.
• More firms: This is the factors that refers that competition in the large market and in
comparison to the firms who are offering more revenue and meeting the competitive
edges in the market which also reflect the satisfaction level of goods and this also impact
in market. In context to Burger King, the overall supply of goods decreases due to
increase in the various competitors who are retaining in the market for long period of
time.
Change in Supply Curve:
Change in supply basically shows the shifting of supply Curve to the right as due to the change
in the various factors. When the given supply of the commodities such as Burger increases than
the respective demand for the commodities also rises and This leads to enhance the overall
revenue and sales of an organization. Increase in the supply of commentary also made right shift
of the given supply Curve from S from S0 to S1There is a reduction in the supply employees in
shifting backward of the supply curve and an organization can organization can have to deal with
huge losses as well.
As above mentioned in the given diagram, It can be said that when the price of the goods
foldstown then the overall supply of the product also reduced but at some point of times of
supplier will not sail the appropriate in minimum prices. And when the supply of product shift to
the right Off supplierWhich also lead high profitability to the company and they can move
further for the growth. When does supply curve often give an Organization then the overall
supply of the company reduces and supply can face huge losses due to their lower sale in the
market.
TASK 2
Compare and contrast emerging theories and models in 21st century contemporary economics
with 20th century & connect then with certain business practices.
There are different theories that is being basically analyzed With the effect of consideration of
growth and they are having various aspects which is having the combination that are given
below:
Neoclassical Growth Theory

This is the economic theory which is basically used to analyze the overall economy and their
fluctuations in the market and it includes different aspect such as labor capital and technology.
The story is given by the Trevor and RObert Solow And it is also showing that they are having
benefits of launching these types of theories with the aim of ensuring long term development in
the field of economics economics esperda national bureau of economic research 1956. This is the
theory that generally emphasizes on short term eclipse which implies in having better amount of
the amount of development and when that organization is not having I've been required
Advancement or innovation with the help of various technologies this theory is somehow
different from the Long term eclibrium which does not need such aspect LikeCapital who
contribute to the betterment and the development of economic measures and also they analyze
how the people using their capital and also contributing to the betterment of the economy of an
organization. Furthermore labor and capital are fixed and the overall production from the firm.
The last aspect is technology that can set the overall output and the company is using their
innovative technology by which they can have higher sale and profitability in the large market.
Keynesian Economics theory
As Part the study, these are the 2 assumption that at prices and the wages of the commodity are
fixed and they are having their own theories that on theories that shows how the entire economy
will operate and firstly they evaluate the overall area demand which influence the major
economic decisions that is being fixed by the private sector and shows the overall
macroeconomics around the nation. This also covers the rad action in overall consuming power
In higher recession and the other aspect is prices and wages that is basically showing the change
in the supply of goods in the market it the last and the final aspect is educ area demand that can
be positive or negative and basically helps in the short term and also influence the prices of the
given per commodity and the employment.
Marx’s Social Economic system
It is the given theory which is having their own consideration related to the capitalism and
communism. The theory is given by Karl Marx And there are basically 2 main components
which are capitalist who analyze the economic and social system and also having positive factors
that can influence the Modern time. Capitalist are the business owners who basically involved
in certain process and also responsible for effective production that includes factory and raw
material at a given point of time.

CONCLUSION
From the above report it is concluded that Demand and supply are the 2 fields of an economy
which ensure the flow of good sense offices in the large market. Income of the consumer their
taste and preferences and the given prices of the product are the factors which influence the
demand and there is inverse relationship between the demand and the prices of the commodity in
the large market. Technology cost of production objective of the company are the factors which
basically typically decides the supply of the given commodity in the large market. Lastly new
classical theory, Marx’s Social Economic system and Keynesian Economics theory Ask certain
theory which is given by the the famous economist which ensure the future development and
growth of the economy.

REFERENCES
Books and Journals
Augustynczik, A.L.D. And et. al., 2020. Socially optimal forest management and biodiversity
conservation in temperate forests under climate change. Ecological Economics, 169,
p.106504.
Barrese, J., Phillips, C. and Shoaf, V., 2020. Why do US public companies continue to join the
UN global compact: Ethics or economics?. International Studies of Management &
Organization, 50(3), pp.209-231.
Alam, M.K. And et. al., 2020. The influences of board of directors and management in Shariah
governance guidelines of the Islamic banks in Bangladesh. Journal of Islamic
Accounting and Business Research.
Karatepe, O.M., Aboramadan, M. and Dahleez, K.A., 2020. Does climate for creativity mediate
the impact of servant leadership on management innovation and innovative behavior in
the hotel industry?. International Journal of Contemporary Hospitality Management.
Kells, S., 2020. Impacts of COVID-19 on corporate governance and assurance, international
finance and economics, and non-fiction book publishing: some personal
reflections. Journal of Accounting & Organizational Change.
Vertakova, Y., Kazantseva, A. and Plotnikov, V., 2020. Green supply chain management as a
tool for transforming the economy in the transition to the sustainable development
concept. Agricultural and Resource Economics: International Scientific E-
Journal, 6(2), pp.37-56.
haktawat, A. and Vadhera, S., 2021. Risk management of hydropower projects for sustainable
development: a review. Environment, Development and Sustainability, 23(1), pp.45-76.
Zhang, J., Hassan, S.T. and Iqbal, K., 2020. Toward achieving environmental sustainability
target in Organization for Economic Cooperation and Development countries: The role
of real income, research and development, and transport infrastructure. Sustainable
Development, 28(1), pp.83-90.
Dzyuba, A.P. and Solovyeva, I.A., 2020. Demand-side management mechanisms in
industry. Journal of New Economy, 21(3), pp.175-195.