International Marrketing

Section A

1. Factors that affect the demand curve to shift in this article can be taste and lifestyle. As rice can affect humans health with high carbohydrate, one might be concern and start changing to other food which is healthier. This will reduce the demand for rice. Graphically, the demand curve will face a leftward shift.

price[pic 1][pic 2]

[pic 3]

[pic 4][pic 5]

        D

        D1        

                                        QD

 Number of buyers can also be a determinant of demand for rice. As Malaysia’s daily staple is rice, demand of rice will increase. As population in Malaysia increases, the demand for rice also increases. This will shift the demand curve rightwards.

           price[pic 6]

        [pic 7][pic 8]

        [pic 9][pic 10]

                D1

        D        QD

1. Determinants that can affect the supply of rice in market can be natural disaster. Since there were storm and floods at certain country which are the main supplier for rice, the supply of rice will reduce due to that disaster. This will cause a leftward shift in the supply curve  

             price[pic 11]

[pic 12]

        S1[pic 13][pic 14]

        S[pic 15]

                                                                               QS

Number of sellers can also affect the supply of rice in the market. As there are many supply from Vietnam, Thailand and other countries who imports rice to our country, the supply of rice increases. This will shift the supply curve rightwards.

              price[pic 16]

        [pic 17][pic 18][pic 19][pic 20]

                                           S1

                                                             S

QS

1. As Thai rice’s price increases, demand for the locally-produced rice will increase. This is proved by the determinants of demand – substitute of other goods. As locally produced rice is less expensive, demand for it will be higher. This will cause a shift in the demand curve rightwards.

        price[pic 21][pic 22]

[pic 23]

 [pic 24]

        D1

        D               [pic 25]

QS

D)

Question 2

1. A rise in the price of bus journey will increase the demand for taxi journey.  This is related to the determinants on demand – price of substitute good. The demand curve will shift rightwards.
2. Taste and lifestyle of consumers who wants comfortable journeys will prefer taxi journey. This will shift the demand curve rightwards.
3. Increase in income for consumers will cause them to prefer more comfortable lifestyle. Therefore taxi journey will be their choice. Demand curve will shift rightwards.
4. Expectations of consumers will encourage them to prefer taxi journeys. The demand curve will shift rightwards.
5. Increase in rate for taxi will reduce demand for taxi journeys. This will cause a downwards movement in the demand curve.
6. A plan pay freezing will reduce customer’s income. Therefore, demand curve will shift leftwards.
7. This introduction will reduce demands for taxi journey. The demand curve will shift leftwards.
8. Increase in population will increase demand for taxi rides. Demand curve will shift rightwards.

Section B

1. The law of demand tells us that, ceteris peribus, consumer will buy more of a product when its price declines and less when its price increases. The responsiveness of consumers to a price change is measured by a product’s price elasticity of demand. To calculate price elasticity of demand, the formula given is

                 Percentage change in quantity demanded for product X[pic 26]

                          Percentage change in price of product X

The larger the number of substitute goods that are available, the greater the price elasticity of demand. The elasticity of demand for a product depends on how narrow the product is defined.