Macroeconomics is usually related to employment and inflation rates and is important for managers to assess all indicators and economic factors inside the company. FamilyDollarGrociers is an American variety store chain owned by Dollar tree and known for grocery, clothing, cleaning suppliers and home decor. They operate products on slimmer margins than grocery stores and because of the lack of freshness and damage of products; they are often offered products at a lower price. The firm is presently experiencing fluctuation in daily sales and due to this new sales manager, Joe Dobb appointed but does not care about the macroeconomic concept of demand and supply analysis. Although, it is not possible in this complex competitive world to look for the best solution to deal with the fluctuation problem and assess the cost incurred by the consumer. As an individual, my role is to deliver the concept of a newly appointed sales manager to configure partial equilibrium analysis importance with the help of macroeconomic concepts.
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Demand is a concept that refers to the amount of some product or services customers are interested in and able to purchase at a certain price (Lumenlearning.com, 2023). Demand is usually based on requirements and wants and from an economist's viewpoint; these are almost the same whereas for consumers both are completely different. For example when the price of gasoline increases people always find ways to reduce consumption as less as possible, commuting by mass transit.
Law of Demand
The law of demand delivers a relationship between price and the quantity demanded and it can be referred to as the amount of solicited increases with a fall in price and decreases with a cliff in price (Economicsdiscussion.net, 2023). The income of the customer remains constant, there is no quick change in the preferences, and tastes of the customers are some assumptions of the law of demand.
Movements in demand Curve
Movement along the demand curve directs that situation where there is an immediate change in the amount of demand of increase or decrease due to change in all the factors due to the change in the price alone (Enotesworld.com, 2023). The movement in the demand curve occurred due to a rapid change in the prices, leads to an upward and downward shift, and remains constant of all other factors. Contraction and expansion of demand are two important types of changes in quantity
Diagram and explanation of movement in the demand curve in FamilyDollarGrociers
Figure 1: Movement along a demand curve at FamilyDollarGrociers
A change in price causes a movement along the demand curve. The above figure shows contraction and expansion while less demand and more demand. While selling cleaning suppliers in a workplace in price from $12 to $16 causes a movement along the demand curve, and quantity demand falls from 80 to 60. At that point, sales managers can configure that contraction is in demand and vice-versa for expansion in demand.
Factors in the shift demand curve
The purchase decision of the customer is the main factor that causes a shift in the demand curve. In this business price of related goods, quality and preference and other factors such as income are determinants of demand other than the price of the commodity concerning macroeconomics. Population increase or decrease and transformation in the income level of buyers may also be some major factors that cause a change in the shift demand curve. The presence of all the viable substitutes can shift the demand curve as well and for this reason, a sales manager needs to utilise a digital wallet and needs to assess excellent security as well. For example, black Friday sales are a real-world example of the shift demand curve as consumers buy a large number of commodities at a cheaper price.
Shifts in the demand curve
Figure 2: Shifts in the demand curve at FamilyDollarGrociers
A shift in the demand curve occurs at the time of any changes in the whole demand curve or the demand curve moves to the left or right. In addition to that, if the quantity demand of a commodity is an increase or decrease of prices other than price is known as the same shift due to rapid change in the determinants (Enotesworld.com, 2023). A shift in the demand curves while selling cleaning supplier at this workplace occur more if the price of the substitute increased with a rise in incomes. The above figure shows that the quality of the product completely changed as the whole demand curve moves to the left, which means people, buy widgets at the same price and affecting factors can be a substitute in products.
Explanation of supply
Supply is an economic term that refers to the quantity of a particular service or product and is closely related to the concept of demand and simply utilises when supply is high and demand is often low (Capital.com, 2023). In other words, it can be also defined that when the price of any product in the business is high, it means the business looking to achieve high profit and that is why the business looks to offer a product or service at a higher price.
Law of supply
The law of supply is the microeconomic law, which usually informs that all factors are the same, as the service increases all other quality of services or products that the supplier in the supply chain offers will increase as well and vice versa. It also describes the changes in the behaviour at the time of changes in the price of services and goods (Wallstreetmojo.com, 2023). For the grocery business, it is more vital as would be helpful for finding economic equilibrium and if equilibrium does not suitable for profit making then controlling business can be risky as well.
Movements in Supply Curve
As the price of the provided commodity in any business increases, all ease being are completely equal where the price is always considered as an independent component and quantity as a dependent. An increase in supply occurred due to the change of all factors affecting supply except for the price. It does not maintain the path described by the law of supply.
Diagram and explanation of movement in the supply curve in FamilyDollarGrociers
Price (in Rs.)
Supply (in kg)
10
100
25 (rise)
250 (extension in supply)
5 (fall)
50 (contraction in supply)
In the above table, while selling processer products how movement in the supply curve changes is depicted when the price of goods increases from Rs. 10 to Rs. 25, and a producer's supply also increases from 100 units to 250 units. At the same time, with a decrease in price from Rs. 10 to Rs. 5, the suppliers also from 100 to 50 units. This is referred to as a contraction of supply and that can be clarified with a graph as well.
The above graphical figure shows movement in the supply curve in which SS1 is an upward sloping usually representing upward-sloping curve representing various comparisons of supply and price. The initial price of the product is P1 with the corresponding supply Q1. Point e1 represents a combination of means of the supply of a commodity and represents quantity support as well. The movement from e1 to e2 along the supply curve change in quantity delivers its price of the commodity for indicating a large amount of supply at changes in price due to non-determinant price factors by the nature of the effect.
Factors in the supply curve
The supply curve can shift or because several factors including changes in the production cost such as labour costs and material costs, level of competition and technological process. The factors in the supply curve are also related to the regulatory and tax environment that describes consumer willingness to pay a reliable price for goods or services. For example in a grocery store, there is a possibility that technology plays a key role in the supply chain process and that can increase the price of the service higher.
Shifts in the supply curve
Figure 4: Shifts in the supply curve at FamilyDollarGrociers
In grocery stores, a sales manager faces issues related to price and quantities supplied assuming no other factors change. Higher or lower quantity cans one of the potential reasons behind this shift change. The above figure shows even at the same price when an organisation supplies more goods to consumers. P1 represents expansion in the capacity of existing firms to reduce the cost of goods as targeting sales configured an increase in supply. Although, it is earlier mentioned that price is an independent product in macroeconomic conditions, which can change at any time whereas the product's quality is dependent that can be maintained in a workplace with extra revenue. An expansion in the price from 80 to 116 causes an increase in quantity supplied from 60 units at both conditions as price changes due to changes in factors but product quality remains the same as shown in the graph.
Task 2: Compare, contrast and relation of 20th and 21st century in modern business practice
In this complex world, firms have to apply various business practices in their business for meeting all the objectives with the execution of the marketing plan. In economist matters, theories are concerned as the mother tongue of public policy and tools using this theory helped to manage planetary homes and tackle problems such as global poverty in modern-day business practice. The development of marketing theory and practices changes decade by decade since the start of the 20th century (Naim, 2021). In the 20th century, economic theory helps businessmen and leaders by delivering a powerful message concerning the inequality factor. However, extreme inequality turns out necessity or economic law and is delivered as a design failure and that means going beyond pre-distributing wealth lies in controlling land to create money easily without any deliverables factor. "Adam Smith Classical theory of the free market" and the "Capital theory of Karl Marx" considered as most significant and advantageous theories for modern-day business practice. The classical theory examines that it needs to provide freedom to people to exchange and produce products as they free trade and can open the markets mostly up to promote greater prosperity with government regulations. the commercial practice uniquely cultivates mutual trust and respect and basic economic liberties must be availed to all in protecting commercial activities as an effective part of the business structure (Cowen, 2021). As the invisible hand guides the economy, self-interest and market economy are feasible to evaluate the economic system adequately. Competition is the main regulator of the economy, as other self-interested people compete in the marketplace, having strategies to become unique as compared to the competitor is important. Philosophers believed that government had an important role, and due to this reason enforcing patents and granting copyrights to deliver new ideas is necessary and term supportable with the modern theory of 21st-century business. This theory has determined wealth can only be created with the help of the self-interest of labour and utilising effective resources is necessary for thriving competition and a free market and earning money. Moreover, capital theory displays the connection between subsequent and current economic decisions and for this reason, it is necessary to deliver a level of output and reach in a dynamic context. it refers to the educational attainment and skills of an employee that has the incentive to seek existing employees and recognise labour capital is not homogeneous. As per this theory, value delivers money into the capital in a quicker succession conceived as having "self-expanding" value. Marx examined capital as not only the major value of the transform reproduced value in the modern-day business problem but also exhibit and for this reason, a substantial aspect needs to be determined. A major client of capitalist for profit needs to deny wage goods as the product of "coaxing labour" of all fellow workers attributed (Yagi, 2021). Marx also urges that society is mainly composed of two main classes and those are social class and business class. Thus a class struggle is invertible in such a society and played in different ideas until the eventual overthrow of the capitalist system.
In the 21st century, the business model usually is just one of the four pillars and is critical for all business enterprises concerning all the pillars one by one is necessary to attend theory and business model. Media considerations, political landscape and social impact are important key pillars that need to be assessed by the manager's side for practising the modern-day task. Behavioural theories and nudge theories are some modern-day theory which observes the workplace as a socially concerning environment. A behavioural theory of management includes employee satisfaction with their workplace, job and relationship and led to understanding employees treated like humans with recognition of their wants and needs. In this way, it has been seen that classical theory's viewpoint is almost similar to important factors into account that is closely related to an explanatory framework with physical activity changes. An economic theory that has deployed in the early 20th century has long portrayed environmental degradation while restoring the cyclical process of life on earth to create a non-linear economy. Bigger companies in this competitive market increase the scope of their business it is important to have that capable resources which can cover all the risks associated with the business (Khalik and sum, 2021). Learning about management and economies theory, flexible increase in change and tactics is necessary for allowing the times and market demands with more relevant strategies as per the complex situation.
Nudge theory is another important theory that is relevant to self-developement, motivation, change management, and leadership. It advocates change in an individual manager or a group perspective through indirect methods and helps to think appropriately by being offered choices and enabling all the outcomes that organisations mostly work for. From a decision-making perspective, human behaviour can affect making better decisions and explains individuals choose options over one another. In modern-day business situations, managers in a workplace face issues to be a part of an effective decision-making process as they do not have that much knowledge of behavioural science. Positive reinforcement may influence motivations easily and it is necessary for a leader to be aware of consumer behaviour and for this human-centred approach is necessary. Using subtle direction is also mandatory for a manager to thrive with competitors in a successive way rather than enforcing it. For every organisation and country it is important to equip new principles and patterns and radical flip needs to be perspective as well that will be fit for the future in assessing the complex issue in a business. Earning profit with the ongoing current policies is the primary function of modern business and not denying old-school principles necessary for all business leaders of the modern era.
Grigsby-Calage, C., Mullally, C.C. and Volpe, R.J., 2021. The Geography of Dollar Stores. https://scholar.archive.org/work/wbkvqjwuhbdchdoxbplib2f7wu/access/wayback/https://tind-customer-agecon.s3.amazonaws.com/79996c40-0bb9-4dca-bed8-aac9e7cf8287?response-content-disposition=attachment%3B%20filename%2A%3DUTF-8%27%27Abstracts_21_06_18_09_02_51_94__128_227_1_47_0.pdf&response-content-type=application%2Fpdf&X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz-Expires=86400&X-Amz-Credential=AKIAXL7W7Q3XHXDVDQYS%2F20210804%2Feu-west-1%2Fs3%2Faws4_request&X-Amz-SignedHeaders=host&X-Amz-Date=20210804T130823Z&X-Amz-Signature=97f603215564e2f9b5176c2e51af12015bd3dfc37e0500c732559e5d721bb50b
Khalik, Z.A. and Sum, R.M., 2020. Enterprise Risk Management (ERM) Behaviour Matrix: Mapping ERM Implementations of Non-Financial Public Listed Companies in Malaysia. Journal of Advanced Research in Business and Management Studies, 19(1), pp.42-59. https://www.akademiabaru.com/doc/ARBMSV19_N1_P42_59.pdf
Naim, A., 2021. Applications of Marketing Framework in Business Practices. Journal of Marketing and Emerging Economics, 1(6), pp.55-70. https://openaccessjournals.eu/index.php/jmee/article/download/666/637
Yagi, K., 2021. Marx’s theory of capital in the history of economics: Marx’s concept of capital, classical school, Austrian School, and growth theory. Evolutionary and Institutional Economics Review, 18(2), pp.465-489. https://link.springer.com/article/10.1007/s40844-020-00196-9
