Set up a yoghurt ice cream store after 'A' Levels Exam – PDG 1112 Group 5

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Increase in demand

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Set up a yoghurt ice cream store after 'A' Levels Exam – PDG 1112 Group 5

hi :)

Explain the concept of scarcity, choice and opportunity cost when you are deciding whether to set up the Yoghurt ice cream stall.

Opportunity Cost

Opportunity cost is the cost of any action or decision, measured in terms of the highest valued alternative forgone.

Education and future career prospects which the student would be able to garner from entering a top university.

Choice

Choice is to allocate scarce resources so as to maximise the satisfaction of the most wants.

For whom to produce?

The general public

How to carry out the venture

Through the setting up of the yoghurt ice cream stall

What to use the time on

Yoghurt ice cream stall

Scarcity

The situation that exists when there is excess of human wants over what can actually be produced to fufill these wants.

Time is limited

Wants

Set up a Yoghurt ice cream store

Go to university

Using the extract above (you may include other relevant economic concepts), describe the demand and supply factors that you will consider when you set up a Yoghurt Ice cream stall at AMK.

SUPPLY

3 different competitors (size of industry)

Increase supply by setting up another stall

Price will decrease due to the increase in supply

Leading to the increase in price of milk

Increase in cost of production

Lower the profit level of producer

Decreased supply

DEMAND

Singaporeans have been earning higher income

More people willing to pay for normal good

Therefore there are little substitutes

Demand is not likely affected by change in price of goods in competitive demand

Taste and preferences

Only stall selling yoghurt ice cream in AMK Hub

People may find that the yoghurt icecream is something different so rather than the usual icecream, they go for yoghurt icecream.

People that are more health conscious as it is a yoghurt icecream, where yoghurt is beneficial to health.

Increased demand