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Law of demand
Law of demand is a fundamental concept which is present in economics. The pricing of the goods and services can be determined on this aspect so that there is a good transaction which is going to be present in every day routine. This law discusses that the purchase and quantity of sales is going to vary on the pricing of the products and services which the company is having for the customers in the market. The behaviour of the clients has to be understood so that there is a better sale which can be made by businesses (Mazurek, García and Rico, 2019). Behaviour of the customers is going to be similar which can be understood and well balanced and that is going to make sure that the company is having the right economic factor. The curve is going to move outwards when the prices are lower and the quality is good of the product and services or they are unique in nature. As the prices are increased by the business then the curve will move inwards which is that the company will not be able to have a stable economic factor for the long run. Rise in pricing is going to change the mindset of the clients which are present in the market which has to be well developed so that there is a good spending that is present.
Law of demand has a lot of cases for example, Lays which experienced this law of demand. The pricing of the raw material is higher than the products and services which the company sells therefore the company increased the pricing. This made the company have a loss since the quantity of the product and services was less and pricing was higher of the same (Conway and Eckersley, 2017). It is very important for the company to have the understanding of this law so that there is a profit again which the company can have therefore Lays reduced their pricing but the quantity of the product and services reduced in order to have higher profits from the market. Lays also found an alternative to be able to find a good working which is present. Nature of the customers has to be well addressed so that there is going to be right balance that is going to be present. Fear of losing customers is present in all the businesses therefore it is important to understand the demand of the clients so that there is going to be higher operations and working. It is on the demand of the clients will the raw material and other processing of the company would be planned for which is going to make sure that there is good quantity which is present. Same product is also going to make the demand of the clients be limited therefore improving and changing the product with time is important for the company to be able to have a stable working in the market (Guan, 2017).
As the pricing of the product and services is increased the curve reduces which is that the quantity of the demand is going to be lower as the prices gradually increase. It is very essential to make sure that the businesses understand the clients well so that they would be able to make sure that they are taking the right actions to be able to get the right working. Income level is going to differ from place to place of the population which has to be well understood so that there is a good. There is a good scale and formula which can be used to make sure that the law of demand is being used so that there is going to be right financial working (Olowolafe, 2017). Demand is present for all the products and services which are present in the market but the customers get attracted to the products which are priced lower in the market which is a very important factor which has to be adopted by others as well. Businesses in the market have to make sure that they are having the right pricing strategy to make sure that there is going to be higher operations and working which is going to be present. When there are a lot of changes in the price then that’s known as elastic demand which is going to make sure that there is good balance that is present. Good balance has to be found between pricing and demand which is present in the clients so that there is going to be good purchase.
Law of supply
Law of supply is another concept which is directly related to the pricing and quantity of in the business of the products and services. The relation is that when the prices of the products and services increase then the quantity of the supplies increases with it which is a very important factor to understand. This is a very practical law for the businesses to be able to target to have higher profits which is a very good factor. For instant raw material for the production of the products can increase anytime therefore the pricing of the product and services can vary accordingly. The organization needs to be certain about the pricing of the products according to this aspect so that the company would be able to make sure that there are better operations. There is a lot of technology which can provide the assistance which is going to make sure that there is a good pricing which the company can have for the long run (Dean and et.al., 2020). The demand can get affected when there is a rise in the pricing of the company which has to be monitored and controlled so that the company would be able to get the right placing for them in the market. The company has to get higher placing for them in the market since the competition is very high and this aspect has to be done for the good.
Businesses in the market need to have a good economic stability which is going to make sure that there is a good balance that is present. Investments is high in the market of the businesses which is going to make sure that there is good working which is present. Pricing increased then the quality of the product needs to be higher as well and the product is going to have limited customers as well. Supplies are going to be higher since the quality of the product is improved which is going to make the costing of per unit of be higher than before which makes the changes in the mind set fo the customers (Fang and et.al., 2018). Customers mind set has to be well understood so that there is going to be higher functioning and working which is going to be present. Pricing must be done by the organizations in the market which is having high competition must be done effectively so that they can make a strong place for them in the market. Changes must be got in to make sure that the clients are getting the best facilities that are good for the reputation and working of the company for the long run. Quantity of the products has to be according to the price so that there is a better standard which can be gained by the company for the long run. Supply has to be higher as well so that the company can make sure that they are having a stable economic factor. The customer base is not the issue but the economic factor has to be stable to make sure that the company is operating effectively in the market.
The daily wants and demands of the clients are changing with time and this factor has to be maintained by the company to be able to get the right stability in the market. Consumers must be heard and understood well for the company to have a higher pricing of the products for them so that there is a good stability that is present. New products which are being launched for example, the company is going to have a law of supply situation for the organization to be able to find a stable place for them which is going to make the working be affected (Wilde, 2017). Entrepreneurs and other new marketers will not be aware of this factor and it is very important for them to be aware of this aspect so that the company will be able to have higher profitability in the market. There are restrictions which are present and are according to the suppliers as well which are present and they have to be adapted by the company to be able to find stability. There is a lot of competition which is present in the market and it is very important to make sure that there are actions which are being taken according to this factor which is going to make the stability be higher.
Theories and models of contemporary economics
There are a lot of theories which are present in 20th century and 21st century, and the two which are selected for the further report are modern monetary theory and neoclassical theory. These two theories also impact the working of business practices which is also to be discussed further.
Contrast
Neoclassical theory belongs from the 20th century and modern monetary theory belongs from the 21st century. Neoclassical only is about economic stability where as the other theory is for the currency and unemployment as well. There are currently a lot of unemployment rates which have changed in the 21st century. There is a lot of international trading which are taking place and they have to be monitored and controlled in order to make sure that there is effective working and processing which is present (Popov, 2018). There is 6.6% unemployment rate in the 21st century but in 20th century there was 24.9% unemployment rate which was a great depression for the world. Self employment in the 21st century is focused upon since there are so many new ideas which are developing in the world which is a great factor for the countries to have for the long run. 2021 has been a bad year for the population since 2016 United Kingdom had not seen as bad a situation like this of the unemployment. There are three elements which are present in neoclassical growth theory which are labour, capital and technology (Haller, 2020). There are changes in the technology which are coming in the market since the 20th century which is very essential for the businesses to adapt in order to have higher operations and working. Production functions are worked upon but it is important to focus on the population as well so that the economic stability is going to be higher (Popkova, 2018). The economic factor of the country has to be increased by having the right working and functioning which has to be present. Decisions in businesses are made according to the theories to be able to have a stable economic factor which is going to make sure that there is a good working which is present for the long run of the business that is going to be present.
Compare
Neoclassical theory and modern monetary theory may belong from different centuries but work for the economic factor of the country. These two theories help the businesses to understand their economic factor in order to make sure that there are right actions which are being taken for the higher operations and working (Johnson, 2017). The economic factor is the main concern which has to be focused up which is a great factor which both these theories are having and make sure that the business is also developing in market. Understanding of the market is also going to be higher if the theory of the economic factor is going to be present so that there are right decisions and planning which is going to exist. Productivity and cycle of the business has to be understood well so that there is a good stability which is going to be present for the business to have for the long run (Hansen, 2018). Good discussion has to be done as well so that the business would be able to have a good working which is present. There is a lot of competition in the market and there must be right operations which have to be taken in order to be able to have a higher working that is going to be there. PReferences are different of all the businesses in the market and this aspect has to be monitored and controlled so that the company will be able to have a good working. There are a lot of theories that are present and that is going to make sure that there is good saving that the company is having for the long run. Both the theories are practical for international marketing and businesses that is going to get in higher economic stability in the market that is a very important factor for the company to have (Kelton, 2020).
Related to modern business practices
Both the theories are very practical for the modern business practice that is going to make sure that there is stability in the working which is present. Modern businesses have changed and need to be focused not just on the economic factor but also the labour and technologies as well which the company is investing within (Petrakis, 2020). Businesses have to make sure that there is good working and processing which the company is having so that there are good operations and working which the company can have for the long run so that the organization would be able to find stability. Theories make the working and processing of the organization is present for the long run despite of all the competition that is present. Theories are developing in the market for the benefit of the businesses in the market and this factor has to be understood by the companies (Buedo-Fernández and Liz, 2018). The businesses have to make sure that they are adapting to the right theories which are present in the market so that they can have a higher working and processing than the competitors in the market and gain the competitive edge. Unemployment is a great concern for the businesses which are present in the market and this aspect has to be controlled and monitored so that there is good working and positioning which is present for the long run. Population is increasing and contemporary economic theories and models can help the businesses be able to understand the elements of the market well to be able to have a better economic factor (Zhang, 2017). Businesses must take advantage of the weakness of the market to be able to have a personal profit from it so that there is a better working that is present of the business in the market for the long run.
REFERENCES
Books and Journals
Buedo-Fernández, S. and Liz, E., 2018. On the stability properties of a delay differential neoclassical model of economic growth. Electronic Journal of Qualitative Theory of Differential Equations. 2018(43). pp.1-14.
Conway, A. and Eckersley, P., 2017. When does law enforcement's demand to read your data become a demand to read your mind?. Communications of the ACM. 60(9). pp.38-40.
Dean, E and et.al., 2020. Demand and Supply at Work in Labor Markets. Principles of Economics: Scarcity and Social Provisioning (2nd Ed.).
Fang, H and et.al., 2018. Network evolution model for supply chain with manufactures as the core. PloS one. 13(1). p.e0191180.
Guan, D.X., 2017. Transaction Cost and the Law of Demand.
Haller, A., 2020. From classical and neoclassical economic growth to degrowth in Europe. Challenges for public administration. Administratie si Management Public. (34). pp.150-170.
Hansen, A.H., 2018. Monetary theory and fiscal policy. Pickle Partners Publishing.
Johnson, H.G., 2017. Macroeconomics and monetary theory. Routledge.
Kelton, S., 2020. The deficit myth: modern monetary theory and the birth of the people's economy. Hachette UK.
Mazurek, J., García, C.F. and Rico, C.P., 2019. The law of demand and the loss of confidence effect: An experimental study. Heliyon. 5(11). p.e02685.
Olowolafe, O.A., 2017. Beyond fraud: a critical analysis of illegality as potential exception to the autonomy principle in the law of demand guarantees and letters of credit (Doctoral dissertation, University of Johannesburg).
Petrakis, P.E., 2020. Theoretical Approaches to Economic Growth and Development. Springer Books.
Popkova, E.G., 2018. Contradiction of economic growth in today's global economy: Economic systems competition and mutual support. Revista ESPACIOS. 39(01).
Popov, A., 2018. Evidence on finance and economic growth. Handbook of Finance and Development.
Wilde, V., 2017. Perceived Price: Subsuming Violations of the Laws of Demand and Supply. Available at SSRN 3011071.
Zhang, W.B., 2017. Economic Growth and Structural Change–A Synthesis of the Walrasian General Equilibrium, Ricardian Distribution and Neoclassical Growth Theories. Asian Development Policy Review. 5(1). pp.17-36.
Online
Boyle, M., 2021. Law of supply and demand. [Online]. Available Through: < https://www.investopedia.com/terms/l/law-of-supply-demand.asp>.
