CST 620 Managerial Economics Assignment: Palm Oil Production and Trade

This managerial economics assignment analyzes the palm oil industry, focusing on Malaysia's trade balance, demand, and elasticity. The solution calculates the balance of trade for 2010 and 2011, highlighting a favorable balance in both years. It examines the impact of increased demand in 2013, which led to lower prices, and discusses the relationship between palm oil and soya oil as substitute goods, exploring the concept of cross-elasticity. The assignment references relevant academic sources to support the analysis.

Managerial economics

Contents
TASK...............................................................................................................................................3
1.balance of the trade...................................................................................................................3
2. The impact of an increase in demand......................................................................................3
3. Elasticity..................................................................................................................................3
REFERENCES................................................................................................................................4

TASK
1.balance of the trade
The balance of the trade in the economic measures which tends to be calculates by the
difference between the imports and exports of the country in the specific period of time. I order
to have the analyse the Malaysian trade such as-
In the year 2010
553.3-434.9 = 118.4 (favourable)
In the year 2011
639.4-529.2= 110.2 (favourable)
As the comparison between the two years of the balance of trade of the country, the year 2010
the country has the more level of favourable balance of trade (Wardman and et.al., 2018). As the
result it can be indicated that’s in the upcoming the years the Malaysian governments will have
the restriction in the exports of the palm oils.
2. The impact of an increase in demand
As in the year 2013, there palm oil productions have the hitting of the new records as the
seasonal outputs which have the outweighed rising the export demand in the significant impacts
of the lowering the prices all about the 5% in the year. This will have the capturing there more of
the food sectors as the manufacture to respond the consumer demand for the natural products.
3. Elasticity
The palm oil and soya oil have the substitute goods which have the economic impacts moving to
the cross-elasticity of their demand which have the measuring the responsiveness in the quality
demanded of the soya’s oil when the process of the palm oil changes (Sinha and Saini., Adobe
Inc, 2018. ). There is positive relationship between demand of the good tends to increase when
the price of the substitute goods fall. As the rest the price of the palm oil have fallen will have
negative impacts of the demand of soya oil.
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REFERENCES
Books and Journals
Online
Wardman, M and et.al., 2018. Review and meta-analysis of inter-modal cross-elasticity
evidence. Transportation Research Part A: Policy and Practice, 118. pp.662-681.
Sinha, A.R. and Saini, S.K., Adobe Inc, 2018. Computerized simulation of cross elasticity based
actionable pricing outputs for single brand multi-product sellers. U.S. Patent Application
15/633,854.
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