Economics: The Importance Of The Different Market System

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Introduction

Economics is the branch of science that deals with the different aspects and relations of the manufacture, circulation and consumption of the product between the people in the financial term. The nature of the economics in any nation or organisation is totally dependent upon the economic representatives of that nation (population) or organisation (labours) working together and the alliance among them. Economics in an organisation can also be understood as the movement of money through different channels like as, labours, stake holders, taxes, employees and customers etc. In this paper the diverse parts of the financial aspects will be examined and I am taking Sainsbury as an example.

Task 1

A. Explain the economic problem
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There are two laws which plays role in attaining the Equilibrium in the market they are, the law of Demand, and the law of Supply. The law of demand can be explained as other things kept constant, as the price of a product or good rises, its quantity demanded will fall or vice versa. The law of supply can be explained as other things kept constant, as the price of a product or good rises; its quantity supplied will rise too, and vice verse.

B. Evaluate the importance of the different market system in general and evaluate the role of opportunity costs in determining how an organization makes economies decisions?

There are different techniques used by the organizations to judge the effect of various systems of market. These techniques are:
• Return on Marketing Investment
• Marketing Performance Measures
• Account Marketing
Through these techniques various marketing systems are calculated. Other than these techniques, the help of various Key Performance Indicators are taken into action to classify the different market systems. An organization must consolidate all the components keeping in mind the end goal to coordinate the original strategy and Key Performance Indicators for the assessment of the different systems. These
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Unitary Elastic – The goods which do not show any changes in the results with the concept of elasticity of demand.
Inelastic – The good which partially does not follow the concept of elasticity of demand.
Perfectly Inelastic – the good which does not follow the concept of elasticity of demand at all.
In the case of Sainsbury, “the third largest chain of supermarket in United Kingdom”. We can look out for the examples of elasticity of demand very easily. For an instance the fall or rise in the price of food, shelter and machines do not show elasticity of demand, as they fall into the category of basic needs of people and so are inelastic in nature. But if there is any slight change in the price of liquor, or any other luxuries which are elastic in nature you can notice the fluctuations in the elasticity of demand. Elasticity of demand can be classified as:
Price Elasticity Demand: In this situation a rise or fall in the price of a commodity is directly proportional to the change in the demand of the commodity.
Income Elasticity Demand: In this situation a rise or fall in the income of the buyer is directly proportional to the change in the demand of the

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