The Influence Of Two Contrasting Economic Environments On Business Activities Within A Selected Organisation

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P5: Describe the influence of two contrasting economic environments on business activities within a selected organisation.

Introduction
In this document, I will be describing the influence of two contrasting economic environments on business activities within a selected organisation. I will be writing about supply and demand, unemployment, inflation, government policies and GDP.

Step 1: Demand and Supply

Demand
Demand is when customers are willing to pay for a product or service at a reasonable price. It is also the quantity of a good or service that the customers will buy at a certain price.

When there is a high demand for a product or service, the price increases. When there is a low demand, the price drops to allow the product to gain more sales.

The factors that influence demand are:

Affordability: The affordability of a product is dependent on how cheap or expensive it is. When the prices of the goods that Sainsbury’s sell drop, they become more affordable to their customers. For example, if Sainsbury’s were to lower their prices of their goods during the recession, they will most likely increase their sales.

Competition: If the products that Sainsbury’s sell are similar to products other supermarkets sell (e.g. Tesco), there will be competition on that particular product. Some examples of what the competition of the product relies are the price, choice (different types/versions of that product), and taste (food related). As Sainsbury’s faces a lot of
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