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PRINCIPLES OF ECONOMICS

( ECO 120 )
ASSIGNMENT 1

NAME :

MUHAMMAD ASYRAF BIN

MUHAMAD POZI
MATRIX NUMBER :
PROGRAM :
GROUP :

2014641478
CS 143
CSD2Cq

QUESTION 1
a) Surplus. Because the output or supply is more than the
demand (excess of supply). Which is output or supply is
30,000 tonnes per year while the demand only 1,500 tonnes.
Output/Supply = 30,000
Demand = 1,500
Supply Demand = 30,000 1,500
= 28,500

b)

Based on the diagram above, it show that the demand curve


(DD) and supply curve (SS) are intersect. Surplus is the
difference between the quantity demanded and quantity
supplied in a market, where the quantity supplied is greater
than the quantity demanded.

C)

Demand of pepper
Demand of pepper is inelastic demand. Inelastic demand is a
condition in which a large percentage change in price will
only affect a small percentage change in quantity
demanded. Products which are purchased more frequently,
such as pepper that is use for cooking, will tend to have
inelastic demand.
Demand of cars
Demand of cars is elastic. Elastic demand is a condition in
which a small percentage change in the price of a product
will lead to a larger percentage change in the quantity
demanded. Demand depend on the value of a good whether
it cheaper or expensive. If the price of potato is increase
consumers will be less sensitive to the situations because
the affects is small in their income. But, when the affects is
big in their income for a more expensive product such as car,
demand will be elastic.

d)

e)
Ceiling price. The policy that the government can use to
stabilize the price of
pepper is government can set the
maximum price for the seller to sell the pepper (maximize the
price).
f) The steps that the government has taken to increase the
demand for pepper is working in hand with FAMA, the board is
organizing pepper festivals in the various states. Next,
government also support services like distribution network, to
help the board to increase the demand for pepper locally. In
tandem with the growth of the food processing industry, the
pepper expected to grow bigger. There is also a nationwide
promotion drive of local pepper.

QUESTION 2
a) Monopolistic. Because athletic shoes has more than one
brand names, such as Adidas and puma. So, consumers can
choose which one that they want to buy. Each brand have a
different design and packaging.

b) Monopolistic. There are many of sellers that open


restaurants there would be stiff competition among the seller
for their product. So, the sellers must use promotion,
discounts, and free gifts to attract customers to come at
their restaurants.
c) Monopolistic. Each firm tries to promote its product like
watches using different types of advertisement. The
advertisement include banners, billboards, and pamphlets.
The cost of production will added.
d) Oligopoly. In an oligopoly, the number of firms is small but
the size of the firm is large. For example, in Malaysia, aircraft
are in an oligopoly market where only a few firms control the
overall industry in an oligopoly. Not all the firms can get in
oligopoly market because the business policy.
e) Monopolistic. There are no entry and exit barriers to get in
ice cream industry but there are not as easy as perfect
competition. The ice cream that we supply must have
difference with other ice cream in term of quality, shape, and
taste.