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ECO162 Fundamentals of Microeconomic

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Added on  2021-07-09

ECO162 Fundamentals of Microeconomic

   Added on 2021-07-09

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k ECO162 Fundamentals of Microeconomic Title: Coca-Cola Supply and Demand Analysis
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INTRODUCTION This assignment is about the supply and demand of Coca-Cola according to the market. In this assignment we are be able to know about the supply and demand of Coca-Cola according to the change in consumers behaviourism depending on the price of Coca-Cola in the market. Coca-Cola is carbonated soft drinks which also known as Coke. Coca-Cola was introduced to public on 8th May 1886. Coca-Cola was the first company in the world that is produced non-alcoholic beverage and became most successful company in the United States. The company is one of the famous brands in the world. According to the data the company has more than 80% operating profit from other countries which is 95% of the world known about the Coca-Cola. Overall, in this assignment we are going to dive in the supply and demand analysis of Coca Cola as well as the elasticity and the nature of monopolistic competition of Coca Cola. SUPPLY Definition of Supply Supply is defined as the ability and willingness of the producers to supply goods and services at different quantities based on different prices and time. Law of Supply The supply of Coca-Cola is normal goods. This is stated on the law of supply where, when the price of Coca-Cola increases, the quantity supplied for Coca-Cola also increase and when the price of Coca-Cola decreases, it will also make the quantity supplied for Coca-Cola decrease. Coca Cola has a positive relationship between the price and quantity supplied. The graph shows upward slopping supply curve where it indicates a positive relationship between the price and the quantity of Coca-Cola. The following is the hypothetical supply curve for Coca-Cola: Quantity Coca-Cola Supplied (bottle) Price (RM) 3000 1.00 5000 1.50 7000 2.00 9000 2.50 11000 3.00 13000 3.50
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Diagram 1 From above Diagram 1, we can see that when the price of bottles of Coca Cola increases from RM1 to RM2, the quantity supplied for bottles of Coca Cola also increases from 3000 units to 7000 units. Similarly, when the price of bottles of Coca Cola decreases from RM3.50 to RM2.50, the quantity supplied also decreases from 13000 units to 9000 units. DETERMINANTS OF SUPPLY: 1. Cost and availability of the factors of production In one bottle of coca cola, it needs a lot of ingredients such as sugar, natural flavourings and caffeine. For example, if the price of the sugar increases which is increases in cost of production, most likely the supplier will decrease the production of the Coca-Cola. This will show in the supply curve where it will lead to left ward shift. 2. Level of technology The level of technology that have been used to make Coca-Cola is getting advance year by year. This eventually will help to decrease the cost of production. This also will make the supplier willingly to supply more amount of Coca-Cola at the same price. The graph will show that there will be a right shift in supply curve. 3. Number of suppliers In Coca-Cola case, if the number of Coca-Cola supplier in one market increase, this will also make the supply of the goods which is Coca-Cola also increase. This will also show the right shift in supply curve on the graph. 00.511.522.533.5430005000700090001100013000Supply Curve
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