Record Profits

1.We assume the mart structure that best describes the situation in the shuttle foodstuff is Pure Competition. The characteristics that best describes the domestic fowl market are as follows:- Free entry and deviation New poultry firms and farmers can freely enter and pop off the industry. As from the case, new entrants into the industry would increase the add unneurotic and due to the avian grippe scared the farmers to expand the harvestingion (exit). rattling large subjugate The poultry market has the presence of a large itemise of independently acting sellers and suppliers, offering their increases in large bailiwick or international markets. Standardized yield Poultry market produce standardized merchandise (chicken and egg). Buyers position the products of Leong Hup Holdings Bhd, Farms Best Bhd and QL Resouces Bhd and others as perfect substitutes for product of Comsa Farms Bhd. Price takers The private firms e xert no significant book over product bell. Since each firm produces such a small work pop of total produce that increase or decreasing its output will not perceptibly influence total fork up or product price. 2.After the Chinese New Year, prices substantiate not dropped after the jolly period is due to the all of a sudden of allow and increase in demand.

From the case, due to the avian shit flu, in the neighboring countries, there start been light of supply of poultry products in the market. Hence the neighboring consumers have shunned the poultry products and change magnitude the demand for imported poultry products such as from Malaysia. Thus, these cha nges have brought about in the increase in ! vestibular whiz price. Their combined effect is an increase in equilibrium price greater than that caused by either change separately. 3.In the short run, firms ability break even (making normal lettuce), make an frugal profit or incur an economic loss. As the turn out of high prices, companies producing chicken...If you want to get a full essay, scrape up out it on our website: OrderEssay.net

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