Individual Report Cover Page

Course Code & Title : BUS10407 Economics I

Tutorial Session :
Full Name
:LI ZIXI
Student ID No. :54451732
Tutor
: Mr. Tommy Yu
Word Count
:604

Plagiarism Declaration
I have read the section on Plagiarism in the Course Outline and the University
Handbook (also available online) and declare that, to the best of my knowledge and
belief, this assignment is my own work, all sources have been acknowledged and the
assignment contains no plagiarism.
I further declare that I have NOT previously submitted this work or any version / part
of it for assessment in any other unit offered by CCCU or any other education
institution in HK or overseas. If a clear case of plagiarism is found, an F grade will
be given for this piece of work.

Signature
: _________________
Date of Submission : _________________

TelevisionTelevision from shortage to surplus

TelevisionTelevision is extremely rare in the early 1980s, the Chinese. Although the
government controls the price of televisiontelevision but compared with the level of
income, the price is still quite high at the time. It is interesting that you have to buy
the Purchase license ticket to buy the televisiontelevision. After the 1990s,
TVtelevision tends to balance supply and demand. Then after that TVtelevision
difficultly sell, the outbreak of price trend, China opened the prelude to a price war.
1

With the general increase in people's incomes, television TV as the preferred luxury in
1980s. There are many people afford TVtelevision so the surge in demand for
TVtelevision. The price of TVtelevision still get the strict control of the government
at that time (in a price wave, leaders promised TVtelevision do not rise in price) It
cannot raise prices to curb demand, the production capacity of TVtelevision
production was constrained supply cannot be increased rapidly, which creates excess
demand or short supply.
The shortage of televisiontelevision stimulated domestic around the introduction of
televisiontelevision production line, the construction of TVtelevision factory.
TVTelevision set up factories in the whole country, except Tibet provinces. It i's cause
TVtelevision market equilibrium, and even to excess again soon.
A kind of the size of the elasticity of supply of items related to the factors of
production and technology needed to produce. Therefore, the elasticity of supply of
different industry products is different. In general, the equipment is advanced, the
scale of production is not easy to change once established heavy industry, chemical
industry, electronics, automobile and other industries products tend to supply the lack
of flexibility, demand increases, the supply is difficult to increase immediately,
reduced demand, supply and hard to reduce immediately. TVTelevision is the same. A
surge in demand in the 1980 s TVtelevision and TVtelevision factory is restricted by
the scale of production is difficult to increase quickly. But after the 1990 s when
supply exceeds demand, televisiontelevision production is also difficult to have
greatly reduced.
For the same products, the elasticity of supply is not static but related to the length of
time. For many products, when demand and price changes, the possibility of supply of
small change. For example, even if the TV prices of television rise 200% in a very
short period of time, it is difficult to increase production. Because the equipment and
production capacity is fixed, it is difficult to increase raw materials and manpower, in
addition to the stock market is not the supply of external changes. This means that
during the period around the corner, the elasticity of supply is almost zero. In the short
term, despite the equipment and production capacity cannot be changed, but the
increase of raw materials and labor, can still increase production, then inelastic supply,
but larger than the spot. Long-term, the equipment and production capacity according
to market demand and prices are expected to adjust the supply is elastic. From the
1980s to the 1990s, televisiontelevision by the elasticity of supply shortage to balance
it is a process to increase over time. As for the future of the overcapacity situation is
when adjusting the long-term production capacity is expected consequences of
mistakes.
In general, the enterprise should according to market demand and industry for a long
time when investment scale economy characteristics determine the optimal size. Short
term according to the need to react to the changes of the market. In making this
decision must take into account the elasticity of supply. TVTelevision market is not
with that in mind, so that the TVtelevision production decrease with prices down hard
now.
Bibliography:
2

review of economic researchZHOU LIQUN 5.14 2014

Principles of Economics N. Gregory Mankiw