PRINCIPLES OF ECONOMICS ( ECO

120 )

ASSIGNMENT 1

NAME :

MOHAMAD SYAHMI YANI BIN AHMAD

MATRIX NUMBER :
PROGRAM :
GROUP :

201454366

CS 143

CSD2Dq

LECTURES NAME : SHAZLIZA AZREEN

A) If the supplied quantity exceeds the demanded supply , then there is a surplus of
pepper by 30000 tones per year output but only demanded by 1500 tones only per year .
Output/Surplus = 30,000
Demand = 1,500
Supply demand = 30,000 1,500
= 28,500

B)

C) The demanded for pepper is inelastic. A large percentage change in price of pepper will
only affect a small percentage change in quantity demanded . Because of the usage of
pepper in everyday life is so common such as seasoning and is often paired with salt.
The usage of pepper in household is a must as pepper has very little substitution to it
and this is will result pepper to have inelastic demand.
The demand of car is elastic because a small percentage change in price of a product
will result to a larger percentage in quantity demanded . The demanded for car is
usually depend on value of price of the car , most people tend to buy car at a cheaper
price and buy car that are less expensive.

D) Price fluctuation depend on the consumer power of buying

E) The government can gives subsidies so that pepper price can be reduce to a reasonable
and therefore stabilize the price to equilibrium. The government also can implant taxes
to substitutes good such as chilli to increase demand for pepper.
F) The government organize nationwide promotion to promote local pepper. The
government also working with FAMA to organize pepper festivel in the various states.
There are also support services like distribution network , to help the board to increase
the demand for pepper.

Question 2
A ) Monopolistic competitive, because athletic shoes that are usually purchase by
consumer are branded . Branded company like Adidas and Nike tend to monopolize the
industry and .
B ) Restaurant are monopolistic because there are so large number of small sellers
selling different foods and there are a lot of close substitutes product and its easy to
enter and exit the food service industries.
C ) Watches are monopolistic competitive , because like shoes , watches company are
so many , small and big company like rolex , swiss and levis .
D ) Aircraft bussines is definetly to be classify as oligopoly because only a few firm like
MAS and Airasia sell flight services which are high standard and different from other
services , monopolize the industries . The industries is very hard to enter and exit
because of many policy from the government.
E ) Ice cream industries are sure monopolistic because large number of small sellers
selling different type of Ice cream product and usually easy to enter the industries and
exit .