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Santos, Ma. Farina Kim L.

III – AB International Studies

Manufacturing output slowed in September by: Ronnel W. Domingo Philippine daily Inquirer Business Section/B2/Monday, November 29, 2010 In this news article by Domingo, it was taken into account that “the growth in the value and volume of manufacturing output slowed down in September.” According to the data that the National Statistics Office had produced, manufactured goods went down to a single digit in the month of September after a straight two-digit record since January of this year. Although the general graph of manufactured outputs in the month of September had decreased, it doesn’t mean that all companies have slowed down their manufactured outputs. “Output increased in ten of the 13 sub-sectors, fell in two sub-sectors and was flat in one” (NSO, 2010). For value, the top contributors to the boost of manufactured outputs were transport equipment and other miscellaneous manufactured item while the largest contributor to the negative overall output were furniture and fixtures, chemicals, footwear and wearing apparel. For volume, the top contributors to the improvement of the outputs were textiles, footwear, wearing apparels, and beverages companies while losers in outputs were led by nonelectrical machinery, tobacco, petroleum products, and chemicals. We can see here that even though some companies were adding to the outputs in volume, they are also contributing in the decrease in value, and vice versa. One example is the wearing apparel – with this, we can analyze that with the increase in the manufacturing value of this commodity, the company’s capacity to provide enough volume is decreased. Since sellers are

more inclined to produce more if the manufacturing value is low, if the situation is reversed, they are most likely to settle to cut their volume production because the price for manufacturing that certain product is high, therefore, they can not only cut on their expenses but people will also demand more, allowing them to see and take risk to allot more budget to the manufacturing value so that their manufacturing volume would increase, thus granting the people’s demand and earning more. This kind of setting can be classified in a monopolistic competition. A Monopolistic Competition according to Chamberlin, is a type of market situation wherein there are many independent sellers and buyers but competition is not homogenous and perfect because of product differentiation and sellers and buyers are somewhat limited by market conditions. In the news article, monopolistic competition was illustrated when it was stated that the different companies slowed down their manufacturing outputs based on value and volume while some increased theirs. This shows that these companies are independent and have the ability to dictate their own manufacturing outputs, but we have to take note that in a monopolistic competition, these companies are somehow limited by market conditions. I say that the market condition in this one that limits these sellers pertains to the condition of the weather and the current season. Let us take for example the wearing apparel, one top contributor to manufacturing volume. Christmas is fast approaching, and with the increased production in the volume of clothes, we can analyze that people are now starting their Christmas shopping and are starting demanding for new clothes that they would wear during the Christmas Season. In conclusion, we can see here that these companies that manufacture different products have increased and decreased their manufacturing habits alongside each other. This proves that there is monopolistic competition in this article because although they are companies of different products and of different markets, they are still dictated by a certain force that makes them equal.