Be fashionable this Raya!

Feast your self fellow Malaysians for now, you can finally get your hands on fashionable designer clothes a cost that does not burn a hole in your wallet! As Hari Raya is approaching, many retail stores and mega malls have already set up sales and promotion to sell affordable clothes to everyone.

Malaysian fashion designer Datuk Radzuan Radziwill recently joined forces with Aeon Co (M) Bhd to create Busana Tradisi by Radzuan Radziwill in conjunction with the festive season. These limited-edition collection that was launched at Aeon AU2 in Setiawangsa recently was inspired by traditional Malay clothing and designed for comfort and modesty. These collection is of course, available while stocks last.

Due to the big dip in price for these limited-edition clothing in addition to the festive season, demand for these clothes would rise higher than usual. Shifting the demand curve to the right. Because the demand for these clothes is high, firms would capitalize on this by increasing their supply to maximize profit. This would shift the supply curve to the right. Point E, which is the market equilibrium before this, would shift to point E1, rising the price and also the quantity demanded for the product. The new price for the product would be P1 and the new quantity demanded would be Q1.

http://www.thestar.com.my/News/Community/2013/07/08/Be-stylishly-traditional-this-Raya-Malaysian-designer-launches-readytowear-and-affordable-collection.aspx

Analysts positive on Astro in long run

In all firms, the goal is to achieve maximum profit, and to achieve this goal is by making big changes in the company to further satisfy your customers. Saying this, Astro has done so successfully. Despite   of analyst estimates of slightly lower earnings in the first quarter ending April 30, research houses maintain a positive outlook on Astro Malaysia Holdings Bhd performance in the long run.

One of the biggest upgrades that Astro has made is changing the old Astro’s standard definition (SD) to Astro B.yond (HD). So far, 60% of 3.3 million homes with Astro are equipped with the new HD-enabled box and the take-up rate closed the year at 64%.

Astro-Maxis IPTV bundles are due to be launched in April 2013, a month later than analysts expected, but fear not, as the tie-up with Maxis is viewed as an additional means of delivery as well as opportunity to generate extra revenues from video-on-demand services and migration to Superpacks.

http://www.thestar.com.my/Business/Business-News/2013/03/16/Analysts-positive-on-Astro-in-long-run.aspx

Done by, Isaac Nicklaus Pek, 0315378.

Pure Monopoly .

   A pure monopoly exist when a single firm is the sole producer of a product , for which there are no other close substitutes available for that particular product .

Examples of pure monopoly companies are relatively rare but there are a handful of examples of less pure forms . Government-owned or government regulated public utilizes such as the water company or the local telephone company , are all monopolies or virtually so .

  Lets take Syabas for example . Syabas provides water supply to the state of Selangor in Malaysia. Since there are no other companies providing such a service , it makes Syabas a sole producer of this particular service since there are no other available substitutes . Other than that , since it’s a sole producer of this service , Syabas has a considerable control over the price charged on our water usage , making it a price maker . A pure monopoly like Syabas has a nonprice competition . It means that the product produced is either standardized or differentiated . Syabas practices a standardized service .  Lastly , Syabas has no immediate competitors because of certain barriers that keep potential competitors from entering the industry .

 

Reference :

 http://www.nst.com.my/latest/clean-water-supply-in-selangor-kl-steadily-decreasing-syabas-1.281683

 

Done by :

Nabilla Hamidon 0315833

 

Oligopoly in telecommunication firms in Malaysia.

Maxis, Digi and Celcom are three big telecommunication firms. Telecommunication firm in Malaysia such as Maxis, Digi, Celcom has very powerful competition within themselves. This article reflected oligopoly. Oligopoly is a market where there are only a few competitors. Oligopoly exists when the firms have to consider the reactions of the other competitor in setting its price policy.

Maxis, Digi, Celcom and other telecommunication firms set very high entry barriers to entry exist such as copyrighted, economics of scales and others. However, they are mutual independent with each other over controlling price. Their industries are so small that each telecommunication firm has to depend on advertising, marketing, special offer, packaging and many other factors except playing around with their price. Other than that, Malaysia telecommunication firms also faced dilemma on to choose whether to compete or to cooperate with rival firms. If they decide to cooperate, a larger monopoly can be formed and they can enjoy monopoly profit.

In my opinion, Malaysia telecommunication firms should cooperate together so they can  provide better service to consumers.  

 

 

References :

 http://www.thestar.com.my/story.aspx?file=%2f2012%2f7%2f7%2fbusiness%2f11617767&sec=business

 

Done by :
Teo Zijien 0315574

 

 

Elasticity of demand and supply.

Cross elasticity of demand is the measure of responsiveness of quantity demanded in good A due to the change in price in good B. In this case, good B is the complementary good of good A. Good A is car, and good B is gas. Complementary goods have an inverse relationship with the good itself, when the price of complementary good increases, in this case is the gas, this will cause the quantity demanded for cars to decrease.

 

In the diagram above, it shown that the price of the complementary good which is gas, increases from P3 to P4 and causes the quantity demanded to decrease from Q3 to Q4.

The diagram aboveshows the demand curve of cars which shifts from D1 to D2 due to the rise in price of gas, at  a fixed price of P1. The quantity demanded also decreases from Q1 to Q2.

 

This clearly shows the inverse relationship between complementary goods and the good itself. When the price of gas increases, the quantity demanded for cars decreases.         

 

Reference:

http://www.autotrader.com/research/article/car-news/112681/fuel-efficient-cars-in-high-demand-for-now.jsp        

 

Done by :
 Teo Zijien 0315574                                          

How tertiary education is affecting the nation!

If you live in Malaysia, you would know that the fees for Tertiary Education is not something to brush off. Even with help from the government like the Baucar Buku 1 Malaysia (BB1M) and bursary aid, some could not even afford to study in college or universities due to the expensive tuition fees.

However in recent years, Malaysia has emerged as an unexpected contender in the world for higher education. Many international students have lately took their attention into Malaysia. Infact, Malaysia is ranked 11^th for the most sought after country for tertiary education among international students. Malaysia serves as a cost effective option as Malaysian education offers a lot to these students. What and how does this affect the economy in Malaysia?

The most obvious answer would be the increase in Gross Domestic Product. The Gross Domestic Product (GDP) is the market value of all final goods and services produced in the nation in a certain period. There are plenty of ways to measure GDP. In this case, we will look at the Expenditure Approach where consumption + investment + government purchases + net exports.

The increase in total students abroad would increase consumption. Students who study in Malaysia from abroad needs to follow the cost of living here. Consumption like transportation, food, accommodation along with services like haircuts, laundry and air travel would all increase the total consumption in Malaysia and thus the GDP would increase.

Besides increasing consumption, international students who decide to take up a part time job would increase the labor force in the nation. As the labor force is increased, the total production in the country would also increase. This leads to a healthy economic growth. 

As more and more international students are studying in the country, money will increase the cash flow and this will increase the real GDP which refers to the national income. Malaysia aims to attract at least 200,000 international students by the year 2020 and this is worth an estimated RM600,000 billion to the economy.

http://www.themalaysianinsider.com/malaysia/article/government-aims-to-attract-200000-international-students-by-2020

http://www.thestar.com.my/story.aspxfile=%2f2011%2f8%2f18%2fnation%2f20110818140925&sec=nation

Done by, 

Deric Low 0314152

Still searching for the new equilibrium

Consumers and producers react differently to price changes. Higher prices often tend to reduce demand while encouraging supply, and lower prices increase demand while discouraging supply. Economic theory says that, in a free market there will be a single price which brings demand and supply into balance, called equilibrium price. Both parties need the resources that the other has and hence there is a considerable incentive to engage in an exchange.

From a consumer’s point of view, a market that is moving in any direction, is considered good news as it gives a lot of opportunities. However, in a producer’s point of view, it is better to have a stable market rather than one that is constantly moving.

With the Eurozone crisis escalating towards 20, underlying problems are still long way from being resolved. However, despite the dramatic headlines, a sense of perspective is needed. Although the onset of the downturn was almost four years ago, the adjustment process continues. What we are witnessing is a series of at times are economic "aftershocks", as we move to an environment where global growth will undoubtedly be slower and lower. 

Reference

Economics Online (2013) Market Equilibrium. Available from: http://www.economicsonline.co.uk/Competitive_markets/Market_equilibrium.html  [Accessed on: 1/7/13]

http://www.flightglobal.com/news/articles/market-outlook-still-searching-for-the-new-equilibrium-374734/

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Done by: Isaac Nicklaus Pek, 0315378