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I Super Love Econ
Wednesday, 19 February 2014
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Thursday, 11 July 2013
Function and role
of Bank Negara
The functions of
Bank Negara are issuer of notes and coins and it acts as banker to the central government.
Besides, among the major role
of the Bank is the prudent conduct of monetary
policy, which has seen generally low and stable inflation for
decades and thereby, preserving the purchasing power of the ringgit. The Bank
is also responsible for bringing about financial system stability and fostering a sound and progressive
financial sector. There is now in place a well diversified, comprehensive and
resilient financial sector, that is able to meet the increasingly sophisticated
needs of consumers and businesses, and which has become a growth driver in the
economy.
Function of Bank Negara to Commercial Bank
Members of the public are reminded to use the
services offered by commercial banking institutions or the 45 non-bank
remittance service providers approved by Bank Negara Malaysia to transfer funds
abroad. In Malaysia's more liberalized financial environment, members of the
public are free to transfer funds through these authorised entities. The list
of commercial and Islamic banks, as well as approved non-bank remittance
service providers can be obtained from the BNM website.
List of Commercial Bank:
By: Jeff Wong
Tuesday, 9 July 2013
The Determination of Elasticity
The one of the determination of elasticity would be luxuries and necessity. Necessity is the one that we need in our daily life. For example, Indah Water provide us water that we need, but we still need to pay it no matter what the price level are. Because we need it so that human are very sensitive in necessity.
Luxuries would be defined as people want. Human are more sensitive with luxuries because of their price. And when the price gone down, many people will go and buy. For example Louis Vuitton normal bag would be over $1000. But when the price drop to $700, many people will go and buy because they want and have opportunity to purchase at the low price level.
By= Herman Chan
The one of the determination of elasticity would be luxuries and necessity. Necessity is the one that we need in our daily life. For example, Indah Water provide us water that we need, but we still need to pay it no matter what the price level are. Because we need it so that human are very sensitive in necessity.
Luxuries would be defined as people want. Human are more sensitive with luxuries because of their price. And when the price gone down, many people will go and buy. For example Louis Vuitton normal bag would be over $1000. But when the price drop to $700, many people will go and buy because they want and have opportunity to purchase at the low price level.
By= Herman Chan
Concept
of Elasticity
There
are 3 concept of price of elasticity that a firm can use to decide whether to
change the price in the goods and services. Price elasticity of demand measure
the responsiveness to price changes. The concept is elastic demand, inelastic
demand and unit elastic demand. Elastic demand is the percentage change in
quantity demanded more than percentage change in price. Based on the diagram 1,
we can see that quantity has decrease when the prices increase. The company may
decrease the prices to increase the quantity base on the diagram 1. When the
quantity of the product has increases, the company will buy more goods and
services from the suppliers so that both sides will get profits.
Diagram
1.
By= Herman Chan
TNB IS A Monopoly?
A monopoly is an industry with a single
firm that produces a product for which there are no close substitutes. No other
firms are allowed or able to enter the market due to barriers of entry. For
example, Tenaga Nasional Berhad (TNB) is the largest Electric utility company
in Malaysia and also the largest power company in Southeast Asia with MYR 69.8
billion worth of assets. It is a monopoly company. TNB's core activities are in
the generation, transmission and distribution of electricity.
A government directive is also part of barriers to entry a certain industry, but for monopoly the government has set it is as a consequence of imposition of regulation that makes entry of new firms unattractive or almost impossible. Monopoly is inefficient because price exceeds marginal cost so marginal benefit exceeds marginal cost. On all output levels for which marginal benefit exceeds marginal cost, a dead weight loss is incurred. This causes inefficiency in social welfare in which maximum surplus cannot be achieved.
By = Yap Kuan Wei
PERFECT COMPETITION
Characteristics of Perfect Competition
Perfect competition is an
industry in which consist of a huge numbers of buyers and sellers. Every firm
in perfect competition sells identical / homogeneous products which could not
be differentiated from one firm to another. Other than that, firms in perfect
competition are price takers. Every sellers and buyers are well informed about
the prices. Therefore they have no market power in the economy. Furthermore,
there are no barriers to entry into the industry, meaning that everyone which
decided to venture in this area of business can enter or exit anytime. Due to
all the following, established firms have no advantage over the new firms that
just enter the market.
As characteristics stated above are just theories, but they are rarely observed in the real world. Why? Because there are merely any fully identical (zero differentiation) products in the market. For example, even a product as simple as vegetables have differentiation between each other, the way they plant the vegetable, is it organic or inorganic and also the quality and freshness.
Furthermore, when a product comes closest to zero differentiation, its industry is usually consolidated into a small number of firms which becomes an oligopoly. For example, oil companies which sells petrol such as shell, Caltex, Petronas, and Petron. As a result, perfect competition may not exist in the real world.
As characteristics stated above are just theories, but they are rarely observed in the real world. Why? Because there are merely any fully identical (zero differentiation) products in the market. For example, even a product as simple as vegetables have differentiation between each other, the way they plant the vegetable, is it organic or inorganic and also the quality and freshness.
Furthermore, when a product comes closest to zero differentiation, its industry is usually consolidated into a small number of firms which becomes an oligopoly. For example, oil companies which sells petrol such as shell, Caltex, Petronas, and Petron. As a result, perfect competition may not exist in the real world.
By = Kah Hwang
Oligopoly-Coca cola & Pepsi
Oligopoly is defined as an industry
that involve of a few of large firms competing with each other. Both
of these brands are legendary brand rivalry. Coca cola and Pepsi are belongs to
the oligopoly market so they are selling homogeneous products so they can
control over the price but it is mutual interdependence. They need to consider
the action of rival because both of these two brands are perfectly close substitutes
and the demand curve of other products will affected by each other.
These
two brands are using the same pricing strategy that is low-price strategy to
maximize the market profits. Both of them will use cut-throat price competition
to increase their profits during summer holidays. Furthermore, they have to
sign a cartel agreement to set a high barriers to avoid other firm enter this
market. Their profits will roughly equal by the other small firms then the
economic profits of both of these firms will diminished.
Advertising wars of Coca cola and Pepsi
Pepsi and coca cola are the world’s top 100 brand with
research by the report of “Interbrand” 2012.
Reference
Nataraj Pangal., 2010. Price War Analysis – Coke
Pepsi [online] available at:
http://www.slideshare.net/natarajpangal/price-war-analysis-coke-pepsi
By = Wong Teck Sheng
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