Microeconomic Terms and Graph
Details | Page number | 1.0 Article Summary | 3 | 2.0 Introduction | 3 | 3.0 Analysis | | 3.1 Demand and Supply | 4-6 | 3.2 Substitute | 6 | 3.3 Shortage | 7 | 3.4 Elasticity | 8-9 | 3.5 Price ceiling | 10 | 3.6 Consumer and producer surplus | 11-13 | 3.7 Tax | 13-14 | 4.0 Conclusion | 15 | References | 16-17 | | |
1.0 Article Summary
The article “Consumers complain cooking oil sold at higher than fixed price” which was published on November 27, 2012 talks about the consumers concerns on the market price of the cooking oil sold.
2.0 Introduction
Consumers noticed that a 5kg bottle of premium brand cooking oil priced at RM16.90 which was above the recommended ceiling price of RM16.15 for east Malaysia. This had prompted them to alert the Ministry of Domestic Trade, Cooperative (MDTCC). This report will deeply observe, analyze and apply the models and theories into the case study, based on the following concepts, demand and supply, substitutes, shortage, elasticity, price ceiling, consumer and producer surplus and tax.
3.0 Analysis
3.1 Demand and Supply
Demand refers to the quantity of a good or service that buyers are willing to buy, while supply refers to the total quantity of a good or service produced to be offered (Johnson, 2012). Increase in the price of 5kg bottle of premium brand cooking oil which is priced at RM16.90 has raised the consumers concern, especially when the price has exceeded the recommended price ceiling of RM16.15, and meanwhile, 1kg bottled cooking oil was sold at RM4.20 instead of the usual price of RM4.00 (rounded to 2 decimal place), and thus alerted the Ministry of Domestic Trade, cooperatives and Consumerism (MDTCC) (Boon, 2012). This has drawn to the perception that due to the increment price in the cooking oil, the quantity demanded has decreased. Thus, there will be changes in the movement along the curve.
The equilibrium market price is at RM4.00 while the equilibrium
1.0 Article Summary
The article “Consumers complain cooking oil sold at higher than fixed price” which was published on November 27, 2012 talks about the consumers concerns on the market price of the cooking oil sold.
2.0 Introduction
Consumers noticed that a 5kg bottle of premium brand cooking oil priced at RM16.90 which was above the recommended ceiling price of RM16.15 for east Malaysia. This had prompted them to alert the Ministry of Domestic Trade, Cooperative (MDTCC). This report will deeply observe, analyze and apply the models and theories into the case study, based on the following concepts, demand and supply, substitutes, shortage, elasticity, price ceiling, consumer and producer surplus and tax.
3.0 Analysis
3.1 Demand and Supply
Demand refers to the quantity of a good or service that buyers are willing to buy, while supply refers to the total quantity of a good or service produced to be offered (Johnson, 2012). Increase in the price of 5kg bottle of premium brand cooking oil which is priced at RM16.90 has raised the consumers concern, especially when the price has exceeded the recommended price ceiling of RM16.15, and meanwhile, 1kg bottled cooking oil was sold at RM4.20 instead of the usual price of RM4.00 (rounded to 2 decimal place), and thus alerted the Ministry of Domestic Trade, cooperatives and Consumerism (MDTCC) (Boon, 2012). This has drawn to the perception that due to the increment price in the cooking oil, the quantity demanded has decreased. Thus, there will be changes in the movement along the curve.
The equilibrium market price is at RM4.00 while the equilibrium
References: Bernama, 2011. Cooking oil supplied increased for festive season. http://www.theborneopost.com/2011/08/09/cooking-oil-supply-increased-for-festive-season/ (Accessed 27 January, 2013) Boon, Peter http://www.theborneopost.com/2012/11/27/consumers-complain-cooking-oil-sold-at-higher-than-fixed-price/ (Accessed 20 January, 2013) Investopedia. 2013. Shortage. http://www.investopedia.com/terms/s/shortage.asp#axzz2JErdrnik Johnson, Matt. 2013. Economic Basics: Supply and Demand. http://www.sophia.org/economic-basics-supply-and-demand-tutorial Riley, George. 2012. Consumer and producer surplus. http://www.tutor2u.net/economics/revision-notes/a2-micro-consumer-producer-surplus.html (Accessed 26 January, 2013) Wisegeek Yuen, MeiKeng. 2011. Tackle Oil Shortage, Govt Urg. http://thestar.com.my/news/story.asp?sec=nation&file=/2011/7/26/nation/9171491 (Accessed 26 January, 2013)