MIEC Project TS22 Jeremiel Soh by Jeremiel Soh

MIEC Project TS22 Jeremiel Soh by Jeremiel Soh https://padlet.com/jeremielsoh/47cr3tnuooq5 en-us 2017-05-02 14:13:05 UTC 2025-12-31 05:17:55 UTC hello@padlet.com https://padlet-assets.s3.amazonaws.com/icons/Diskette.png Infant Powder suewling https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/172267045 1) Review important requirements> more options> increase supply> more affordable
2) Strengthen restrictions on labeling and advertising of infant milk powder> helps to regulate the consumer behaviours because consumers have a mindset of: "more expensive= better
3) Huge rise in price over past decade> 120%
4) Concentrated market> suppliers have more pricing power.
5) All infant formula sold in Singapore meets the standards so cheaper options are just as good.
6) Gov wants imports of infant formula> to remove barriers> to increase competitiveness> price will then reduce.
7)More options>more sources of supply>greater competition in the market> prices will level out over time.
8)More public education> regulate consumer behaviours

(Suew Ling)

1) Infant milk powder is necessary so it is price inelastic.
Price increases, the demand for infant milk powder will be decreased.
2) Breastfeeding is a substitution, as the price of infant milk increase, people will more consider about breastfeeding and buy less of instant milk powder as infant formula is needed as a form of supplementation. (substitution effect)
3) Government will take steps to facilitate more options (substitutes)
(RuoQi)

Many milk powder brands gives consumer the wrong impression of drinking their milk product will help their child to become intelligent----> parents wants the best for their child---> invest in buying expensive milk powder----> due to the change in taste and preference of consumers, higher demand for expensive milk powder (Lyn Ni)

There are many substitutes milk brands. Which means it is price elastic. The demand for the milk will definitely decrease when the price increases as there is still options to buy cheaper infant milk powder. As it was stated that "There's no real reason to pay up more for something that is just as good and much cheaper". This means that when there is a cheaper alternative to infant powder which is as good, consumers will definitely buy the cheaper ones. (Kenneth)

The demand for milk powder remained high despite the fact that the prices of milk powder increased 120% over the last decade. The supply of the milk powder increased as the manufacturer may believe that it is profitable to sell milk powder. This shows that inflation is happening throughout the decade yet parents are willing to buy milk powder at a higher rate. This is probably because parents believe in the misleading information that higher price milk power= high quality of the product. Hence, the government intended to use Fairprice(as you know Fairprice who originally founded by Mr Lee Kuan Yew) to control the pricing of milk powder. For example, funding a $1.5 million milk scheme, providing 7,500 low-income families with vouchers to buy milk powder this year and even launches Australian formula milk powder.
http://www.channelnewsasia.com/news/singapore/ntuc-fairprice-launches-australian-formula-milk-range-for-under-8948634
(Kang Hao)

]]> 2017-05-17 07:52:01 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/172267045 Elasticity of demand for milk powder lynning31 https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/172269174 Parents are guilty of buying cheaper milk powder---> but the formula for all milk powder have the basic nutritional value for child growth and development---> government will educate parents that all milk powder are similar despite the difference in brand and prices---> so government will increase the choices of milk powder in the market---> more brands of milk powder that have price that ranges from low to high --> more substitutes for consumer to choose from---> higher-end milk powder brand will be more price elastic (Lyn Ni)

Government is applying price ceiling on the price of milk powder---> to protect consumer from being over-charged---> in order to do that, government will exert higher pressure to control the price of milk powder such as to change the import regulation of milk powder and limit advertising and branding of milk powder---> reduce cost spent to produce milk powder---> milk powder becomes cheaper----> higher demand for milk powder (Lyn Ni)

The Government is trying to make more options available in the market which will increase the substitutes so that customers can choose according to their tastes and preferences.
The government will consider controlling measures to exert more pressure to keep prices fair. The government will apply price ceiling on the price of formula milk, which is maximum the prices below market equilibrium. There might be a shortage which caused by the price ceiling forcing consumers to spend time searching for alternatives.
Parents anxiety that they are shortchanging their children if they buy cheaper formula. So they will not consider changing to cheaper formula, they will still buy the same brand no matter how the price changes. So there will be a price inelastic to the formula milk.
(RuoQi)

Government working on increasing supply of formula milk.
The comment stated in the new article that formula milk is more expensive in Singapore than in other comparable countries. Where an increase in the price of the formula milk would decrease its demand for that particular brand but since milk powders is an elastic good for the different brands available, parents are able to get the cheaper brand of milk as long as their child are able to get used to it.

But with the expectation of consumers that cheaper formula means lower quality, they will still purchase more expensive milk formula and hence be making this an inelastic good that does not affect the sensitivity of price change. (Jeremiel)

Milk powder is price inelastic, this is because parents are stereotyping that higher price=higher quality of the product(even though research shows that all milk powder are equally adequate). Thus, even if the price of milk powder inflates, stereotype parents are willing to buy it.
To reduce the price of the milk powder, the government or The Agri-Food and Veterinary Authority of Singapore (AVA) is trying to reduce the price of milk powder (price ceiling) by increasing more choices of milk powder which are cheaper and higher 'quality' (Kang Hao)

]]> 2017-05-17 08:07:01 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/172269174 jeremielsoh https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/176350752 Price of the milk powder is increasing at two times the rate of the increase in income of parents---> higher proportion of income spent on milk powder---> price of milk powder is more demand elastic (Lyn Ni)

I believe infant milk powder, in general, is demand inelastic. As it is stated that, "Given that infant milk formula is a necessity for many parents". Which means milk, in general, is a necessity. But, a specific milk formula is a demand elastic. When prices go up -> Consumer will definitely find a cheaper brand or the same price with a better formula. For this can be proved by Mr Sun, who said: "Price is one factor, another is the perception of what that brand and milk powder can do for their child. Obviously, parents want the best for their children, so they're willing to spend." (Kenneth)

But since the government is also introducing a scheme for infant milk by giving out vouchers. This also means that the demand for milk powder remains the same. As stated in the news: "Given that infant milk formula is a necessity for many parents, the introduction of a $1.5 million milk scheme in February to give 7,500 low-income families vouchers to buy milk powder" (Kenneth)

In conclusion: The price increase -> Demand remains the same
Infant powder, in general, price go up -> demand price inelasticity but a specific type of infant powder, when the price goes up ->demand price elastic. (Kenneth)

With an increased of 120% in the price of an average formula milk, demand does not change much as it is an inelastic good where substitutes for infant milk powder for babies is very limited when it comes to good quality formula milk besides breastfeeding. It can also be demand elastic if we are talking about the different types of infant milk powder brands available and this can be easily affected by the 5 determinant of demand for consumers. (Jeremiel)

Taste and preference and expectation of consumers are important factors to consider as well as said by Ms Sun that " perception of what that brand and milk powder can do for their children." This means that even if prices were to increase, choosing the best choice for their children comes first and parents are willing to spend on it. (Jeremiel)

Prices of milk powder increased 120% over the last decade to $56.06, this affected the low-income families with infant monthly expenses. Thus, the government or The Competition Commission of Singapore (CCS) have looked into rising cost of milk powder and intending to place a price ceiling. However, before placing a price ceiling the government intends to invest $1.5 million milk scheme in February to give 7,500 low-income families vouchers to buy milk powder. (Kang Hao)

]]> 2017-06-14 05:01:49 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/176350752 Everyone can choose up to 3 articles and state a reason why you chose those articles. From there, we will all come together and decide on which articles the group will be working on suewling https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/176618275 The articles need to be related to any miec concepts taught
-demand
-supply
-market equilibrium
-price ceiling/floor
-elasticity of demand
-fallacies
-etc.]]> 2017-06-16 02:16:12 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/176618275 Type of market for infant powder suewling https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/176618918 -Perfect competition: small, identical, easy to enter
-Monopolistic competition: Many, close substitutes
-Oligopoly: Big, few
-Monopoly: One large firm, high barriers, unique. For example, Microsoft

I read in an article that Nestle, Abbott, Mead Johnson Nutrition, FrieslandCampina and Danone made up more than 99 per cent of the fortified milk formula market share in Singapore in 2016, with Abbott making up nearly half of the local market.

With that mentioned, I am 99% sure that the type of market for infant powder is Oligopoly.

I agree with Oligopoly as infant milk powders have a small number of large firms as mention above (Jeremiel)]]> 2017-06-16 02:26:18 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/176618918 Price ceiling? suewling https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/176625027 Maybe the Singapore government needs to step in and put a price ceiling on infant formula because it is a necessity and should not be so expensive. The price rise has been ridiculous and compared to other countries, the price rise in Singapore is the most over just a few years. Supplies say that price rise is due to the money invested in research and development of the infant formulas. However, over the past few years, there has been a huge increase of money spend on marketing, so that may have translated to a higher price of infant formula. Also, infant formula has a concentrated market, so the suppliers have high pricing power and there is a lack of choices and accurate information of the infant formulas.

To protect buyers from being overcharged as stated in one article that "Parents should, therefore, be careful about relying on the claims made by infant formula companies or be misled into using price as a proxy for quality of the product". as not every formula milk provides additional benefits that everyone may be thinking of and nutrients in the formula milk does not defer much from different brands. So the government could step in to make a price ceiling to maintain a maximum price that producers are able to sell at. (Jeremiel)]]> 2017-06-16 04:17:17 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/176625027 Oligopoly suewling https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/176721714 1) Nestle, Abbott, Mead Johnson Nutrition, FrieslandCampina and Danone are the 6 big brands that sells infant formula in the Singapore market so therefore, with these few large firms, infant formula is categorize as an oligopoly competition.

2) Non- price competition
As stated in the articles, the firms producing infant formula increases their market share without changing the price of their product. Instead, the suppliers of infant formula focuses mainly on advertising their brands to market their products well. The ingredients found in all the infant formulas are rather similar regardless of their prices except for those that cater to infants with medical or allergy conditions. Suppliers often take one of the ingredients in the infant formula and place emphasis on the benefits on it and lure in the parents'' attention when in reality, it is just a way they sell their products.

3) Substantial barriers to entry
The buyers of infant formula are brand loyalty and once they find the most suitable infant formula for the child, they tend to only buy that specific brand afterwards. It is much harder for other brands to enter the market when there are already many established and well- know names and eventually, only the few large firms will be the ones left supplying most of the output in the market such as Nestle, Abbott, Mead Johnson Nutrition, FrieslandCampina and Danone.

]]> 2017-06-17 12:50:27 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/176721714 Content page suewling https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177056207 1. Introduction (J)

1.1 Economics

1.2 Normative/Positive

2. Demand (RQ)

2.1 Demand

2.2 Determinants of demand

3. Supply (LN)

3.1 Supply

4. Elasticity (K)

4.1 Price Elasticity of Demand

5. Oligopoly Market Structure (SL)

5.1 Oligopoly
5.2 Non- price competition

5.3 Substantial barriers to entry

6. Conclusions (KH)

7. Appendix

8. Graphs

8.1 Demand Curve

8.2 Supply Curve

8.3 Price Elasticity

8.4

8.5

8.6

8.7

8.8

9. References

]]> 2017-06-21 04:29:22 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177056207 Elasticity snsckenneth https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177162660
Income elasticity
General infant powder - Normal Good

Specific infant powder brand - Inferior good (Cheap) vs Normal Good (Expensive)

Price elasticity
General infant powder - Inelastic
Price Increase - Total Revenue Increase

Price Decrease - Total Revenue Decrease

Time under consideration (Specific)

Necessities vs Luxury

( General - Necessity, Expensive- Luxury )

Availability of substitutes (General & Specific )

]]> 2017-06-22 03:52:10 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177162660 Quantity Supply & Supply lynning31 https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177162758 Quantity Supply
General, Specific- The quantity supply of milk powder increases because the price of the milk powder are increasing. According to the law of supply, when price increase, the supply increase. Thus, the quantity supplied will increase.

Supply
Number of sellers (General & specific- increase) Government going to increase the number of brands in the market which means that there will be a increase in the number of sellers in the market. Therefore, the supply of the milk powder will increase.

]]> 2017-06-22 03:55:20 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177162758 Demand ruoqi56 https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177162990 As the price of infant powder increases, quantity demanded of the infant powder decreases.
(general)
As the price of infant powder increases, quantity demanded of the infant powder increase.
(specific-expensive)
As the price of infant powder increases, quantity demanded of the infant powder decreases.
(specific-cheap)
Parents think that expensive infant powder is better.
Determinants of demand
Money income
If the money income increase, demand will increase.
If the money income decreases, demand will decrease.
(Infant powder is normal good)
The price of related good increase, demand will increase.
The price of related good decrease, demand will decrease.
(specific, substitutes)
Tastes and preferences
Infants prefer to a specific brand, so the demand for the specific brand will increase.
(specific)
Number of buyers
As the number of buyers decreases, demand will be decreased.
Expectation of consumers
Consumers expect the price will increase in the future, so they will buy more.

]]> 2017-06-22 04:01:10 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177162990 Hi all, leeyy01sg https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177364361 You are on correct track in analysis as above. Thanks.]]> 2017-06-25 08:23:27 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177364361 The market structure is acceptable leeyy01sg https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177364449 s]]> 2017-06-25 08:25:52 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177364449 The market structure is acceptable. Thanks. leeyy01sg https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177364457 2017-06-25 08:26:07 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177364457 Analysis on Elasticity is correct. leeyy01sg https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177364590 2017-06-25 08:30:02 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177364590 Features on Oligopoly are correct. Thanks. leeyy01sg https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177364646 2017-06-25 08:32:29 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177364646 Qty Supplied & Supply correctly analysed leeyy01sg https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177364672 2017-06-25 08:33:46 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177364672 Determinants are correct. Please include names of substitute brands in report. leeyy01sg https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177364714 2017-06-25 08:35:26 UTC https://padlet.com/jeremielsoh/47cr3tnuooq5/wish/177364714