Play Station drops X-Box & PS3 prices to Shockable Prices.

By the first time launching the new X-Box & PS3 is at 2005. Many consumers wanted to grab it for its resolution, performance, and the most important “GAMES”. From looking at this situation, we still can find many consumers playing now at years 2013. Although there are many consumers, but there are also some consumers that can’t affordable to buy. Therefore it might be too expensive for buying it at the prices of 599$ & 499$ at years 2005. Good news is years pass by, and the Firms decided to cut their prices X-Box to 184.99$ & Ps3 to 149.99$ at years 2013.

As we know higher brand product sure must be having many competitors. As the most popular games station must be having many competitors outside. We know that a luxuries product is elasticity to everyone. Obviously, when we saw the prices from 599$ drop to 184.99$ or even 499 drop to 149.99$. This will surely make a great increase on demand because it has elastic demand on it.

From any players, we know that although 184.99$ might be become cheaper, but that is still the most expensive prices in the market. Because it contain the best needs and wants that consumer’s need. This is because worldwide games can be easily found from them; this is why it become more elastic due to the substitution effect

As the largest and strongest market competitor, they can even play around the price of play station by increasing or                   decreasing to maximize their demand.

By, Lam Pin Jia

0315226

Is the Walt Disney Company an Oligopoly Structure?

The monarch of this magic kingdom is no man but a mouse -- Mickey Mouse. The Walt Disney Company is the world's largest media conglomerate, with assets encompassing movies, television, publishing, and theme parks. Walt Disney Studios produces films through imprints Walt Disney Pictures, Disney Animation, and Pixar, and its Marvel Entertainment is a top comic book publisher and film producer. In addition, Walt Disney Parks and Resorts operates the company's popular theme parks including Walt Disney World and Disneyland.

Oligopoly is a market structure in which the number of sellers is small. It requires strategic thinking, unlike perfect competition, monopoly and monopolistic competition. Under oligopoly, Walt Disney Company is big enough to affect the market. The Company must respond to it's rivals’ choices, but it's rivals are responding to your choices as well. In oligopoly markets there is tension between cooperation and self-interest. If all the firms limit their output, the price is high, but then firms have an incentive to expand output. The techniques of game theory are used to solve for the balance of an oligopoly market.

An oligopoly is much like a monopoly, in which only one company has control over most of a market. In an oligopoly, there are at least two firms controlling the market. There are only a small number of firms that control the large majority of the market. There is no competitive pricing and consumers only have very few to choose from.Disney's major competitors are the other large media conglomerates, such as News Corporation (NWS), Time Warner (TWX), Dreamworks Animation SKG (DWA), and Viacom (VIA), who directly compete with Disney in various business lines.

However,barriers to entry are high. The most important barriers are economies of scale, patents, access to expensive and complex technology, and strategic actions by incumbent firms designed to discourage or destroy nascent firms. Additional sources of barriers to entry often result from government regulation favoring existing firms making it difficult for new firms to enter the market. 

By, Lee Sin Yee
0315598

TNB- The Monopoly Market in Malaysia

          In economics, monopoly is a firm that is the only producer of goods that has no good replacement is called a monopolist. As practiced, because of legal barriers, true monopolies are hard to find in the U.S nowadays. There are 5 features of monopoly and those 5 features are price discrimination, close entry, price maker, close substance does not exist in monopoly and last but not least single sellers but many buyers.

          As I have analyzed about monopoly, this is an example of a case study about the TNB (Tenaga National Berhad). A publicly listed company, TNB has a monopoly over the communication and distribution of electricity in the Peninsular of Malaysia. TNB is responsible and takes charge on electricity generations, communication and distribution and last but not least retail supply in the Peninsular of Malaysia. TNB was configured in the year 1990, following the corporation of The National Electricity Board in the line with the help of the Government’s privatization policy. By the year 1996, TNB had to go through actual internal restricting with the evolution of many subsidiary firms. Shortly, TNB productions Sdn. Bhd. is charged with the function of the production of a firm and the communication and distribution section get hold of by TNB Communication Sdn. Bhd. and also, TNB Distribution Sdn. Bhd. personally.

         Nevertheless, regardless of Malaysia’s economic downturn, projections be a sign of that Malaysia’s demand for electricity is expected to proceed to grow. For instance, top demand for electricity is expected to grow from 8,471 MW in the year 1998 to 14,095 MW in the year 2007. It is supposedly that the country’s energy reserve margin will fall under the psychological barrier of 30% by 2001.

 
By, Nik Nuralia Binti Nik Fauzi
0315254

Free Market Economy In Malaysia

        Free market means a market economy that is based on demand and supply with small scale or also no government control at all. An entirely free market is a glorify form of a market economy where consumers and suppliers are allowed to conduct, freely. It is based on a common agreement on the price without state intervention in a format of subsidies, regulation and taxes.

         I have analyzed a few free markets economy and Malaysia seems to be a free market. Although Malaysia is a mixed market, but by following the government ways, Malaysia has elements of free market economy. The Malaysian government upgraded the free market with boundary state intervention and export -oriented manufacturer. It exports to the international market were used to wanting to upgrade organized use of country's assets and generate hard currency, which was necessary for catching up and further developing into areas of technological and industrial innovation. The most powerful economic policy in date is the new economic policy in the year 1971 that is introduced by the government to leaden ethnic disproportion, to get rid of poverty and to upgrade the economic rank of the Bumiputera. Malaysia has been a free market economy consistently. Socialism and Communism never made any progress in Malaysia with their halfway plans economic theories.
            Observation with the Government-owned companies and State Economic Corporations had been made, but these existed in collaboration with private programs. Unlike many recent self-governing countries, strict nationalism, which always results in the nationalization of unknown firms, did not bring up its intolerant head in Malaysia.

By, Nik Nuralia Binti Nik Fauzi
0315254

Economy of North Korea

North Korea had a socialized, centrally planned, and primarily industrialized command economy isolated from the rest of the world. Command economic system can be defined as an economic system in which basic economic problems will be solved according to the commands given by the central planning authority or the government.

How does planned/ command economy answer the basic economic questions?

What To Produce:

• This question is effectively answered by the government.
• Consumer needs are often given lower priority as the government gives priority to medical research,scientific and space research and military production.

How To Produce:

• The production method decided by the government is labour-intensive.

For Whom To Produce:

• Goods and services are produced for everyone or for the community.
• Total distribution of production is also assisted by central planner's price fixing and the rationing of scare goods and services. This helps to minimize disparity in income gap.

Another significant fact is majority of property and resources owns to government where the government has the ultimate power. The government of north Korea owns and controls all resources. These include all natural resources, capital resources and labour resources. All transport facilities and the whole financial system are also government-owned. The government allocates all resources according to the central plan. The goal is to use the nation's capital, labor and natural resources in the most effective way possible. This pretty much eliminates unemployment by promising to use each person's skills and abilities to their highest capacity. Not only that, prices of consumer goods and services are fixed by government but not based on market forces. In North Korea, enterprises receive guidance and directives from the government regarding production capacity, volume, modes of production and course of their actions. This is because no firm is privately owned. The government is the final authority to take decisions regarding production, utilization of the finished industrial products and the allocation of the revenues earned from their distribution. Besides, the central plan sets the priorities for production of all goods and services. The goal is to supply enough food, housing and other basics to meet the needs of everyone in the country. In addition, it may have other priorities, such as mobilizing for war or increasing the nation's economic growth.

Well, there are some advantages and advantages of command economy. Firstly, the advantage is low level of unemployment.There is more equal distribution of wealth
and income,thus the income gap will become smaller. Besides,prices are kept under control and thus everybody can afford to consume goods and services. 

In North Korea, the government failed to satisfy people's needs and wants. This is because they have a little choices when buying good and services . Besides, resources will be wasted due to misallocation as they do not consider demand and supply. Another disadvantage is lack of innovations. There is little motivation for technological innovation by outsiders in a command economy. While the central government can sponsor research and development by individuals trained in the specific fields that interest the government, other individuals tend not to innovate without the profit motive.

By, Lee Sin Yee
0315598

Prices of CNY goodies Shoot Up

Prices of CNY delicacies have increased during this Chinese New Year is attributed to supply side factors and demand curve. During CNY, demand for CNY delicacies & goodies have increased. This causes the demand curve to shift to right. For example, shark fin soup. Consumption of shark fin soup has risen dramatically with the middle class becoming more affluent, as communities around the world enjoy increasing income levels.

                             

Moreove, prices of delicacies such as mandarin oranges have increased were up 10% due to bad weather and floods which resulted in lower harvest. The supply curve for these delicacies will shift to left. Besides, prices of CNY delicacies have increased due to higher ingredient costs, wages and rent. Since profits of the firms are strongly influenced by the cost of inputs used in the production process, the cost of production will thus affect how much a firm is willing to supply. The higher ingredient costs, wages and rent imply that it now costs more to produce than before; profit consequently declines. Firms will now produce less at each and every price, causing the supply curve to shift left.

In the analysis above,i have explained why the price of CNY delicacies and goodies rise. However, why is it that businesses readily and willingly increase prices during this festive period when there is a possibility that higher prices will result in a fall in total revenue and hence profits, ceteris paribus? This is where the concept of Price Elasticity of Demand (PED) can be applied.

During the festive period, CNY delicacies and goodies are deemed necessities. As such, the PED for such goods are price inelastic (PED < 1), where consumers do not reduce their consumption of these goods by large amounts, even as prices rise. Hence, retailers willingly pass on the increased cost of production to the consumers in terms of higher price. This rise in price results in a less than proportionate fall in quantity demanded and total revenue will increases.

By, Lee Sin Yee
0315598