Activity 5: Check for Understanding (15min)

Direction: Without looking at your concept notes, complete the following statements:

1. Positive coefficient of Py means that goods X and Y are substitute goods.

2. A demand function is a mathematical equation which expresses the demand of a product or

service as a function of its price and other factors such as the prices of the substitutes and
complementary goods, income, etc.

3. The choke price is the highest price buyers are willing to pay for the commodity.

4. Negative sign of the coefficient of Px denotes the negative/inverse relationship of price and
quantity demanded for a good.

5. Once you plot the coordinates for price and quantity demanded, the graph shows a downward
sloping demand curve.

Activity 3: Skill-Building Activities

Part 1. (Five Forces Framework)

For this activity, I want you to determine which among the five forces of Michael Porter greatly affects
the sustainability of profits of the following businesses. Explain your answer briefly. (Note: You can
choose one to two factors/forces among the five forces stated on the concept note.

Item Name of Business Choose Among the Five Forces Explanation of your answer

1 Jollibee Food Corporation Power of Buyers, Industry Rivalry Presence of

competitors like McDonalds

2 J and T Express Industry Rivalry Presence of Other Delivery Services

3 Milk Tea Business Threats of New Entry Low barriers to entry; easy to put up

4 Toyota Industry Rivalry Presence of other car

companies

5 Rice Dealers and Wholesaler Threats of New Entry, Power of Buyers Easy to setup, Buyers
have a lot of choices
6 Nike Industry Rivalry, Substitutes and Complements Presence of tight competition, imitation

7 Seller of medical supplies and equipment Power of input Suppliers Suppliers

increase their price due to shortage of medical supplies especially on the early stage of COVID19

8 Water Refilling Station Threats of New Entry Easy to setup, Buyers have a lot of choices

9 Sari Sari Store Threats of New Entry, Power of buyers Easy to setup, Buyers have a lot of
choices

10 Starbucks Industry Rivalry, Power of buyers Presence of stiff competition, Buyers

have a lot of choices

Part 2. (Understanding the Market Rivalry)

For this part, kindly state your own personal experiences during this COVID19 pandemic which are
related to the three market rivalry discussed on the concept note namely: consumer-producer rivalry,
consumer – consumer rivalry and producer – producer rivalry. Give at least three (3) scenarios for each
rivalry.

Consumer–Producer Rivalry Consumer-Consumer Rivalry Producer–Producer Rivalry

1. Whenever we are going to market to shop some grocery. While buying something, specially in the
dirty market, I’ve always witnessed how my mom ask for discount to save but not all the time producer
would let that pass because other producer are really into earning so they are not tolerating or giving
discount, instead they are letting their customer pay the price that is assigned or attached to the
product and without discount. 1.Aside from being a student ,I’m also a live seller. There is what we
called “steal” and “mine” during live selling. The customer compete with one another for the right to
purchase the available goods. Last 2 months, I’ve visit my school where I graduated Senior High. And
I’ve witnessed the competition between health clubs forcing them to offer more services and to charge
a lower price.

2 There was a time when I was task by my mom to shop some fresh vegetables. I always choose an item
that comes with a reduced price because that’s what my mom taught me. Then I try to ask for discount
to see if it works. I was nervous that time because that is my first time doing that. Then I said to the
producer: “I would prefer that you let me buy the cabbage and carrots with a discount,. I won't have to
return it because I'll be able to afford it at no extra cost but sadly it didn’t work because they said that,
that’s the original price already. It was one of the most embarrassing moment of my life. Last year we
are task by one of our instructor to showcase our artistic skills in Contemporary Art Subject. We are told
to make our own art like sculpture and painting. And our teacher will choose one person who will
present her/his art works to many people, it was like an auction. Luckily, I was choose to one of those
who will present their art. We did present it to some professional teachers, nurse and to some visitor
through live. Each of the art work have price attached to it. So they are going to bid or compete with
each other for the right to purchase the art works that is being showcase. Buy 1 take one is very
popular in my home town. Whenever I’m walking in the street, I always see a poster or flyer that
contain the phrase ”buy 1 take 1”. This is one of the strategy of the producer to compete with other
producer. As a customer who is struggling financially, I can say that, buy 1 take 1 strategy really works
because most of the business in my home town who utilizing this phrase or strategy is doing great
despite of pandemic while other producers already surrender.

3. I’m also fun of Ukay-Ukay clothes. And that’s one of my favorite pass time. I love doing this because
aside from the fun that it gives, this is were I’ve always got a discount in buying clothes. Some producer
let me have a discount specially if I buy a lot of clothes. But others don’t permit because according to
them, ”business is business”. Like other girls, I also love shopping and this is what inspire me to be a
live seller. Eventhough I’m a live seller, I still engage into some live selling of some of my friend who are
also a live seller. In live selling, the price of each product increase because of the bidding of the
customer and the one who will bid for the higher price will get the product and I’ve experience that
thing, and to tell you honestly, it is very satisfying and fun. I’m a kind of student who love
spending time with my books and studying but I always make sure to rest and to unwind whenever I’m
done with all the exams and deadlines. I tend to unwind by doing window shopping with my friends. In
the shopping center, there is one thing that me and my friends always looking for and that is “50% off”
signage. Especially if the clothes are branded. It is easy to notice that signage because that specific
section or area where there is 50% off signage have a lot of customers. You really have to endure and be
patient just to buy the product. That strategy attract many customer who have low or small budget. As
a result, it makes the producer or business known and successful than others producers.