Demand and Quantity Demanded
Question 1
This article is talking about government has increased the sugar subsidy due to higher world prices, but not because of an impending general election. Government had no choice but must increase the sugar subsidy to prevent the rakyat from absorbing the higher cost. If sugar prices are increased, it will cost a domino effect on all good prices.
Supply is defined as amount of producers willing and able to sell at a given price. There is a direct/ positive relationship between price and quantity supplied. Positive relationship means that the two variables changes in the same directly. This concept can apply in this article because when government increases the sugar subsidy, the cost production of sugar will decreases. Hence, the supply of sugar will increase. This change will cause the supply curve shift to the right.
Suppy of Sugar
Price
The supply curve shift to right
Quantity Supllied
Secondly, elasticity is a measurement of responsiveness of people to changes in economic variables whereas elasticity demand is used to measure responsiveness of consumer to a price changes. Sugar is fairly elastic demand because there are only small changes in quantity purchased if the price of sugar increases without government’s subsidy. This is because sugar is a necessity to everyone and sugar has no much close substitute. Consumers are fairly not responsive to price changes of sugar and they will be forced to absorb the higher cost if government does not increase the subsidy of sugar.
The firm of producing/ selling sugar is defined as perfect competition market model. Pure competition is a market consists of many firms that each must accept the price set by the forces of market demand and supply. The sugar seller cannot decide the price themselves and unable to influence the price of sugar themselves. This is because their product, sugar is homogeneous; buyers are indifferent as to
This article is talking about government has increased the sugar subsidy due to higher world prices, but not because of an impending general election. Government had no choice but must increase the sugar subsidy to prevent the rakyat from absorbing the higher cost. If sugar prices are increased, it will cost a domino effect on all good prices.
Supply is defined as amount of producers willing and able to sell at a given price. There is a direct/ positive relationship between price and quantity supplied. Positive relationship means that the two variables changes in the same directly. This concept can apply in this article because when government increases the sugar subsidy, the cost production of sugar will decreases. Hence, the supply of sugar will increase. This change will cause the supply curve shift to the right.
Suppy of Sugar
Price
The supply curve shift to right
Quantity Supllied
Secondly, elasticity is a measurement of responsiveness of people to changes in economic variables whereas elasticity demand is used to measure responsiveness of consumer to a price changes. Sugar is fairly elastic demand because there are only small changes in quantity purchased if the price of sugar increases without government’s subsidy. This is because sugar is a necessity to everyone and sugar has no much close substitute. Consumers are fairly not responsive to price changes of sugar and they will be forced to absorb the higher cost if government does not increase the subsidy of sugar.
The firm of producing/ selling sugar is defined as perfect competition market model. Pure competition is a market consists of many firms that each must accept the price set by the forces of market demand and supply. The sugar seller cannot decide the price themselves and unable to influence the price of sugar themselves. This is because their product, sugar is homogeneous; buyers are indifferent as to