Depand and Supply
Autor: purewei • January 20, 2016 • Term Paper • 323 Words (2 Pages) • 854 Views
Demand and Supply.
As the nature of Fairprice’s business, as there is a wide variety of products. The amount of non-priced determents that can affect the company’s business are numerous, thus our group will cover on the more prominent ones.
Demand
- Population Size
Fairprice’s products consist of mostly daily necessity that everyone will require. This will allow the products to have a high demand, as will be affordable and able to appeal to the masses. However, in the recent years, the rate of growth in Singapore’s population is decreasing by a huge margin. With 2005-2010 at 3.5% to 2013’s 1.6%. This shows how the population will decrease over the years, and eventually decrease the total demand, causing the curve to shift left.
http://www.todayonline.com/singapore/singapores-population-growth-slows-0
- Income
Another factor that will affect the non-priced determinant is the income. In Singapore, other than supermarkets, there are cheaper alternatives other than supermarket. Such alternatives are wet market, and the neighborhood markets that customers can choose from. Similarly to other products, when income is low, the demand of inferior goods will increase.
In Singapore, the recent year’s GDP per capita is increasing. With 2010 at 46,569, and gradually increasing till 2013 at 55,182. This shows how much Singapore income has been increasing and will be favoring normal goods such like the products in Fairprice.
http://data.worldbank.org/indicator/NY.GDP.PCAP.CD
Supply
- Cost of production
Cost of production will be one of the key factor to altering the supply. Small changes such as wages, raw materials and taxes will be able to affect the cost of production, causing it to move right and left.
One example of these changes are related to government intervention. The government has increase the rate of the Goods and Services Tax (GST). As the rate of GST has gradually increase from 3% in 1994 to 4% in 2003 and finally 2007 at 7%. This has caused the the cost of production to increase. This will in term cause the supply curve to shift left.
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