MILK
Q1a
Land and labour. There are a lot of cows distributed across 15,300farms in the UK, cows need a lot of land to herd. Second is labour because dairy farming is traditional, a labour-intensive, family-base business and cows are milked two times each day so it needs lots of labour to receive milk. Also, the milk in glass bottles need milkman to deliver to school and residence. Q1b
Opportunity cost means highest-valued option forgone and the sacrifice of the next best alternatives in the production or consumption of a good, provided that rational choice is make. By this means that as a country produces more of one good it has to sacrifice ever-increasing amounts of the other. Since the different factors of production have different properties. As the diagram shows the phenomenon of increasing opportunity costs, the production possibility curve is not a straight line but a bowed outward curve. There are 3 movement of production from A to B then C, it means small farmer produced more wheat (the next alternatives)the lesser resources can be used to produce milk due to limited resources.Therefore, the amount of milk sacrificed rises for each additional unit of wheat produced. The opportunity cost of the fifth million units of wheat is 1 million units of milk. The opportunity cost of the sixth million units of wheat is 2 million units of milk.
Q2a
Equilibrium price: at this price, quantity demanded equals quantity supplied. It is a situation that there is no intention to change. The price is that when the supply of goods in a particular market matches demand and the price that maximizes a product’s profitability for a producer. Equilibrium price and output can be revealed using demand and supply curves where the two curves intersect is the equilibrium point. There is no surplus and shortage.
Q2b
There are two factors that affecting the movement of equilibrium price of raw milk. The first is the cost of inputs increased. Cost of production increased, it would lead to supply curve shifting to left because the supply of raw milk decreased(S1 to S2). The second one is the increase in real incomes in the fast-growing BRIC economies. The demand curve would shift to right(D1 to D2) because raw milk as a normal good, as income increased, the demand of raw milk would increase. Also, equilibrium price of raw milk would move up from i1 to i2. That is the reason why the price of raw milk has risen.
Q3a
Income elasticity of demand(YED) is a measure to show the responsiveness of the demand for a good to a change in the income of the consumers demanding the good. The formula for YED is %change in demand divided by %change in income. A positive income elasticity of demand is linked to normal good which is an increase in income will lead to a rise in demand and if YED of a good is less than 1, it will define as a necessity good. Therefore, dairy products can be regarded as a normal good and also a necessity good. People will tend to buy more dairy products in the UK if consumer’s income is rise.
Q3b
Price elasticity of supply is a measure of showing the responsiveness or elasticity of the quantity supplied of a good or service to change its price. The formula of PES is %change in quantity supplied over %change in price.
With regard to cheese, it is a milk-related product. In paragraph 2, there is an increase in the cost of inputs as the cost of production increases, which is a non-price determinant of supply in dairy industry. Therefore, the PES of cheese would be affected by the change in cost of inputs.
Q4.
Profit maximizing output is linked to short run and long run process by which a firm determines the price and output level that returns the maximum profit. Profit maximizing output is found by equating its marginal revenue with its marginal cost. We can find the profit-maximizing output by using marginal curves. As the diagram 4 shown that the intersection X of MC and MR curves is the profit-maximizing
Salmonella poisoning issue The enclosed report contains my analysis of the Salmonella poisoning issue in the recent lot of seafood-stuffed pasta shells. Based on the potential risk to human life, minimization of financial losses and preservation of Mike’s reputation, I recommend that you initiate a recall of the entire lot of pasta…
MANAGEMENT EXECUTIVE SHIRT COMPANY CASE PGP1 – Section A Group 13 Manohar Vankadara Darshan Karkera Sukvinder Singh Sunil Kumar A Touseefullah Siddiqui Q.1) Compute the following quantities for the current production process as well as for Mike’s and Ike’s plans, assuming the plans are implemented as described in the case. Solution: Current batch processing Sales for the Executive Shirt Company are constituted of only a few basic styles and colours. Hence the company…
Her insightful critique is admired by even her own subordinates. Conventional and production-oriented, Kay Sunderland is known for speaking her mind out. She has a single minded approach that aims at delivering everything that the client asks for, just as they…
- his wife couldn't adapt to China-and the other for a better job offer (allegedly). Mike, a veteran manager with 20 years of international experience, had lived and worked in Japan, Hong Kong, and Australia before Heartland sent him to Shanghai. Mike's toughest challenge at tbe outset was the language barrier. He wouldn't have survived without Feng Chen's help. It didn't take long for Mike to learn what cha-bu-duo meant: "almost okay." He hated that word! It was baffling to him: Even though his…
Statement ! 1. intellectual property from sources, other than the data provided in the multi- player version of Mike's Bikes, used in the completion of this assignment. 2. A proper bibliography has been included, which includes acknowledgement of all sources used to complete this assignment other than data provided in the multi- player version of Mike's Bikes. 3. This is the first time that any member of the team has submitted this assignment (either partially or entirely)…
|JayHsquared | |and the results from these decisions from 2003 to 2011. Written by the president| | |of the firm to the Directors of Mike’s Bikes. | |…
on the raise, there are still risks that need to be taken into account. With the restaurant industry being a more mature a new business face a lot of competition from already established dining restaurant like T.G.I Fridays, Cheesecake Factory, and Mike’s. There is also competition coming from other countries when you open up into the global economy like Skyline Bar & Grill Co. The global restaurant industry is projected to reach 2.1 trillion dollars by 2015, but new business that cannot compete with…
Case Solutions Fundamentals of Corporate Finance Ross, Westerfield, and Jordan 9th edition CHAPTER 1 THE McGEE CAKE COMPANY 1. The advantages to a LLC are: 1) Reduction of personal liability. A sole proprietor has unlimited liability, which can include the potential loss of all personal assets. 2) Taxes. Forming an LLC may mean that more expenses can be considered business expenses and be deducted from the company’s income. 3) Improved credibility. The business may have…
Developing an Effective Customer Loyalty Program Barry Berman oyalty programs are offered by both retailers and manufacturers to stimulate continued patronage among consumers through discounts, cash, free goods, or special services (such as free magazines on specialized topics of interest to loyalty program members). While retail cooperatives pioneered loyalty programs through giving members allowances based on their annual purchases, the more modern use of loyalty programs began with Raleigh…