GROUP ASSIGNMENT

Presented by
RMK Y1S1G1 T.G2
 Our Team
CHONG MIN LI LIM ZHI YEW TAN HONG RUI

LIM ZE-CHEN ONG SHAO ONN

 Topic

Tutotrial 3 DD_SS

Question 1
Briefly explain any SIX (6) factors
that shift the supply curve to the
right.
1 2
Technology advancement.
When technology improves,
Expectation of future
price to fall. If sellers
it enables firms to produce
expected the price of
more output with less or the
goods to be lower in the
same number of resources,
future, they would sell
this will decrease the
more products for now
production costs, thus firms
to increase their profit.
will increase supply.

3
When the government subsidizes the
production of a good, it will lower the
producers’ production costs, therefore
producers will increase supply.
 4 5
The number of sellers Increases in a
market will cause the supply curve to
shift to the right. As more sellers enter
the market, larger quantities of goods
are offered.
Restrictions and acts that are
beneficial to specific suppliers
made by the government also will
cause the supply curve to shift to
the right. For instance, the
government made restriction on The price of inputs decreased also causes

6
carbon emission will directly push the supply curve to shift to the right.
forward the expansion of electric When the price of inputs like land, labor,
vehicle industry because resources and capital decreases,
suppliers must meet the producers will increase their production.
government’s policies.
 Question 2
Supply curves slope upwards because a higher
price is an incentive to producers to produce
more goods. As a product’s price rises, the firms
Why do supply
would tend to be more willing to produce it to
curves slope
earn greater profit.
upwards?
Explain.
Furthermore, the law of increasing opportunity
costs. When a goods production is increased, it is
necessary to bid a higher price to elicit more
output.
 QUESTION 3
Identify and illustrate
the impact on the
equilibrium price and
quantity in sugar
market for the
following events
Q
(I) Buyers expect higher future price
U
Buyers who expect the price of a good to be higher in the
E future may buy it now, thus increasing the current demand for
S the good. Demand curve shifts to the right. Equilibrium price
rises and equilibrium quantity increases.
T
I
O
N
3
Q
(II) Government increase subsidies for sugar
U
E When the government increases subsidies for sugar, this
will lower the production costs and increase supply.
S Supply curve will shift rightward. Equilibrium price falls
and equilibrium quantity increases.
T
I
O
N
3
Q
(III) There is a decrease in the incomes of consumers and
U sugar is assumed as an inferior good.

E When there is a decrease in the incomes, the demand for

sugar as an inferior good wil rise. Demand curve shifts to the
S right. Equilibrium price rises and equilibrium quantity
T increases.

I
O
N
3
 QUESTION 4

Graphically explain the impact on the equilibrium

price and quantity in the local bicycle market for
each of the following events
 (I) More people cycle to work
to avoid traffic jams

Due to the increasing of the populations of cycling, so it lead to a higher demand

for bicycle. Therefore, the demand curve will shift rightwards as showing the
local bicycle demand is getting higher. From the diagram, D0D0 will shift to the
right toD1D1. As a result, the quantity demand for local bicycle will increase,
from Q0Q0 to Q1Q1, causing the price in the marketplace increase, from P0P0
move to P1P1. The equilibrium price rises and quantity rises as well. This is
because the supply of local bicycle is constant but the demand rises to avoid
traffic jams, showing in the diagram from E0E0 to E1E1.
DIAGRAM 4.i
 (II) Many bicycle shops open for
business in Klang Valley

Due to the number of bicycle sellers have increased, showing that the
competition among the local bicycle market field will be more competitive.
Therefore, the supply curve will shift rightwards as showing the local bicycle
supply is getting higher. From the diagram, S0S0 will shift to the right to S1S1.
As a result, the supply for local bicycle will increase at the same price, so the
quantity demand in the marketplace also will increase. The equilibrium price
falls and equilibrium quantity rises. This is because the demand of local bicycle
is constant but the supply from Klang Valley has rose and occur the
phenomenon of surplus.
DIAGRAM 4.ii
 (III) The price of imported bicycles has
increased by 20%

Due to the price of imported bicycles has increased, the local bicycle demand will
increase because most of the people will more likely to go with a cheaper choice,
which is local bicycle. Therefore, the demand curve of local bicycle will shift
rightward as showing the demand of local bicycle is getting higher. From the
diagram shown, the equilibrium price rises, and the equilibrium quantity demand
will also rise.
DIAGRAM 4.iii
 Using demand and supply curves,
examine the effects on the
equilibrium price and quantity in the
education industry in Malaysia for
each of the following situations:

Q
UE
STIO N
(a) Due to the COVID-19
pandemic, the government
has enforced the Movement
Control Order (MCO) since 18
March 2020 requiring all
academic institutions to
close down temporary.
The biggest factor is from government
restriction. All academic institutions to close
down will reduce learning opportunities.
Therefore, the supply curve in education field
will shift rightward. It has effected supply
rises, meanwhile the demand is constant. So
S1 will shift to left side chance to S2.
Equilibrium prices will rises, Equilibrium
quantity will falls.
DIAGRAM 5.a
(b) The MCO has restricted all international
flights from entering Malaysia.

When the government restrict international flights, there

will be fewer foreign students wish to study in Malaysia.
It will effect demand falls, supply is constant in education
industry. Therefore, the demand curve will shift to the
left. Since, foreign student cannot come to Malaysia
study so demand for Malaysia academic institutions will
decrease. D1 will shift to left side chance to D2.
Equilibrium price will falls, equilibrium quantity will falls.
DIAGRAM 5.b
 QUESTION 6

Using demand and supply curves, examine the effects on

the equilibrium price and quantity in the food industry in
Malaysia for each of the following situations
 (a) In year 2020, the Conditional Movement Control
Order (CMCO) policy is implemented during the
Ramadan’s month and restricted the seller to open their
stalls at Ramadan’s market.

As the Conditional Movement Control Order (CMCO) policy is implemented, the sellers of
Rahmadan Market are restricted to open their stalls. This restriction will likely result in a
decrease of supply of goods in Rahmadan Market. Therefore, the supply curve will shift to the left
(S1>S2)

On the other hand, the demand curve will likely to be the same as consumers still have to follow
the proper rules and regulations similar to MCO period. As an result, the demand curve remains
the same (D1)

This interaction of the new supply curve(S2) and the demand curve (D1) will lead to a new
equilibrium point (Q2P2) . The equilibrium price will rise to P2 while the equilibrium quantity will
fall to Q2 which means the price of goods sold in the Rahmadan Market will rise and the quantity
amount of good supplied will be lesser whereas the demand of buyers will also decrease.
DIAGRAM 6.a
 (b) Food Panda, the food delivery company, offers a 20%
discount on all deliveries.

When Food Panda, the food delivery company, offers a 20% discount on all deliveries, It
effectively reduces the price at which consumers can purchase food through Food Panda.
Therefore, this will tend to change their preference on buying food. This led to an
increase in demand for Food Panda orders. As a result, the demand curve of food panda
orders will shift to the right (D1 >D2)

The supply curve will likely remain the same as the 20% discount does not affect or
encourage seller to sell more goods. As a result, the curve will remain unchanged in S1

In conclusion, this interaction of the new demand curve(D2) and the supply curve (S1) will
lead to a new equilibrium point (Q1P1) where the equilibrium price increased to P2 and
equilibrium quantity increased to Q2 which means the price of delivery food will increase
as well as the amount of delivery food orders.
DIAGRAM 6.b
Question
Time