Running Head: MICROECONOMIC

ECO2101 Microeconomics
CA1 Individual Report
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Running Head: MICROECONOMIC

Singapore Institute of Management Global Education

Diploma in Management Studies
DMSQF

July 2022 Semester

ECO2101 Microeconomics
CA1 Individual Project 22 July 2022
Submitted by:

Name : _____________________

Student ID : ___________________
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Running Head: MICROECONOMIC

Table of Contents
1. INTRODUCTION...................................................................................................................3

2. ANALYSIS.............................................................................................................................4

2.1 ANALYSIS 1- COFFEE AND KETCHUP.............................................................................................4

(TOPIC1: PPF AND OPPORTUNITY COST)............................................................................................4
2.2 ANALYSIS – COFFEE CAPSULE IS IN TREND AMONG COFFEE LOVERS....................................................6
(TOPIC 2: DEMAND AND SUPPLY)......................................................................................................6
2.3 ANALYSIS-COFFEE CAPSULE GLOBAL MARKET REPORT......................................................................8
(TOPIC 3: SUPPLY DETERMINER ANALYSIS)...........................................................................................8
2.4 ANALYSIS-COFFEE PRICE OF ICE COFFEE INVENTORIES...................................................................10
(TOPIC4: MARKET EQUILIBRIUM)....................................................................................................10

CONCLUSION.........................................................................................................................12

REFERENCES..........................................................................................................................13
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1. Introduction

The marketplace employed for the sale of finished products or services to firms and the public
sector is referred to as the "product market" in economics. Because it focuses on selling
completed items rather than raw materials and other intermediate resources, it does not
involve trading in these commodities. This is since trading in raw materials and other
intermediate resources require more resources. Both the financial market and the labour
market are examples of marketplaces.
In this context, this report will develop the microeconomic concept of the chosen product,
Cofee. The idea will be analyzed based on an international market overview. Four articles from
the recent period have been selected to conduct the economic analysis of the specific product.
Based on the PPF concept analysis, the report will be outlined an international product analysis
of Coffee.
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2. Analysis

2.1 Analysis 1- Coffee and Ketchup

(Topic1: PPF and Opportunity Cost)

Source: This analysis is based on the article, “From coffee to ketchup, retailers seek price
'shields' as inflation runs riot” published on the Mint website and written by Richa Naidu and
Jesica Napoli.

Summary: The article stated that consumers have been more likely interested in coffee
products in the last two months. It also overviewed that European consumers are trending to
buy Coffee more than any other refreshments. The article will be analyzed based on the PPF
concept.

Analysis:
In this article, as per PPF concept analysis, Figure 1's horizontal education axis is vertical for
healthcare. If all of society's resources went to medical treatment, it might reach level A. It lacks
educational resources. If all its resources went to education, it might get production level F.
Alternately, the community may develop any combination of education and medical care on the
production frontier. Alphonso's financial restriction is like society's productive frontier. The PPF
may hold any mix of the two commodities. It lacks funding to grow beyond the PPF.
It highlights the link between education and healthcare. Assuming society has chosen point B, it
is now exploring new educational opportunities. Due to the PPF's counterclockwise left-to-right
slope, society can only increase education by reducing healthcare. This is society's trade-off.
Suppose they are contemplating a journey from point B to point C. Opportunity cost, and
Alphonso's budget limitation may be shown using the production possibilities frontier slope.
From the analysis, "This PPF seems like a financial limitation."
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Figure1: Graph representing the variable ration comparison of Coffee and Ketup buyers
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2.2 Analysis – Coffee Capsule is in trend among coffee lovers

(Topic 2: Demand and Supply)

Source: This analysis will be developed on another article on International coffee product
analysis. The article chosen here is "Coffee capsules market to surpass US$9.8 billion by 2032",
published in the Global Coffee report.

Summary: The article shows a future view of coffee capsules in the international market.
According to projections made by Future Market Insights, a rise in coffee consumption, as well
as an increasing need for fast and convenient coffee solutions, would drive up sales of coffee
capsules.

Analysis: As per the article, the production boundary cannot be exceeded. If both or one of the
commodities' output is below the production frontier, this signals unemployment or excess
capacity. When the amount of Y produced decreases and X production increases, Y has been
converted into X. Opportunity cost curves are often called transformation curves or product
substitution curves.
The marginal rate of y-to-x transformation determines the opportunity cost curve's slope
(MRT). It's the ratio of Y's quantity change to X's.

MRTxy = δy/δx

More X equals less Y. Hence MRT is negative. It signifies the production potential curve slopes
left to right.
MRTxy is X's marginal cost/ Y's.

δC = MCX. δx + MCy. δy
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Constant returns maintain MCX relative to MCy. It means the production possibility or
opportunity cost curve is negative. If production incentives fall, MCX increases.

MRTxy slope improves. Concave and negative opportunity cost curve. MCX decreases if
expanding returns control production. MRTxy falls. The opportunity cost curve is negative.

Figure 2: This graph shows that coffee capsule has a production possibility that other coffee
types among generation Y.
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2.3 Analysis-Coffee Capsule global market report

(Topic 3: Supply determiner analysis)

Source: This analysis has been developed on the article, “Coffee Capsule Global Market Report
2022”, published on Yahoo finance.

Summary: This article explains the sales of coffee capsule goods and associated services
included in the coffee capsules market. Coffee capsules are used to make fast and convenient
Coffee in establishments such as restaurants, bars, households, and businesses. A coffee
capsule is a compact container in the form of a cylinder that is hermetically sealed with
aluminium foil. It contains ground coffee.

Analysis: As per the above article, desired quantity is the quantity that buyers are willing and
able to buy at a particular price during a certain time period, provided all other conditions stay
constant. "If all other things stay the same" is "ceteris paribus" in Latin. Imagine this: Each
month, 100,000 individuals in a city buy $8 movie tickets. 100,000 $8 movie admissions are
projected every month. If the price was $12, we'd expect fewer sales. If the price were $4, we'd
expect more demand. If other parameters, like the town's population, changed, the quantity
demanded at each price would vary. To accommodate for this, the definition of quantity
required currently requires no substantial adjustments.
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Figure 3: Graph showing the coffee capsule market demand and supply in the Global industry
A demand schedule shows the quantities of an item or service wanted at different prices over
time. This assumes no additional changes. U.S. coffee demand illustrates a demanding timeline.
We'll ignore the varied coffee beans and roasts and simply speak about Coffee. Figure 3.1
shows a demand schedule and demand curve. The chart shows monthly coffee needs at $9 to
$4 per pound. The figure shows the demand curve. The quantity wanted decreases with the
price.
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2.4 Analysis-Coffee price of ICE coffee Inventories

(Topic4: Market Equilibrium)

Source: This analysis reveals the article, “Coffee Prices Remain Firm On Tight ICE Coffee Inventories",
written by Rich Asphalt and published in Bar chart.

Summary: The articles summarized that The company plans to offer its wares online in an effort
to capitalize on the growing demand for Coffee in India. In 2020, the global coffee business had
a value of 102.02 billion dollars, and it is anticipated that this value will increase by 4.28 per
cent annually during the subsequent five years. It was the first time a product subscription
service had been offered.

Analysis: Analysis of the article shows the same demand and supply patterns at $8 per pound.
Demand and supply aren't balanced at this price. At $8, customers will buy 15 million pounds of
Coffee every month. The monthly supply curve indicates 35 million pounds sold. The monthly
overage is 20 million pounds. Supply outweighs demand when prices are current. Current price
> equilibrium price = surplus.
The equilibrium price will be lower if the demand curve moves more to the left than the supply
curve, as illustrated in Panel (a) of Figure 3.11, "Simultaneous Decreases in Demand and
Supply." The new equilibrium price is $5 per pound. If the supply curve shifts left more than the
demand curve, the equilibrium price would be higher (b). The new equilibrium price is $7 per
pound. Since both curves move left in Panel (c), equilibrium pricing remains $6 per pound.
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Changes in equilibrium price and quantity from two occurrences must be examined individually.
If both occurrences cause equilibrium price or quantity to move in the same direction, price or
quantity will follow. If one event raises price or quantity and another lowers it, the amount
each curve moves determine what occurs.
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Conclusion

The above analysis depicts that the coffee market in the international microeconomic structure
is balanced in the way of analysis. This chapter's demand and supply model helps us understand
each product or factor market and how they're related. Popular economic analysis tool:
demand-supply model. Market observations support the concept's results. This model helps
economics.
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References

Arnold, D. (2022, May 11). The coffee capsules market to surpass US$9.8 billion by 2032. Global
Coffee Report. https://www.gcrmag.com/coffee-capsules-market-to-surpass-us9-8-
billion-by-2032/
Asplund, R. (2022, July 19). Coffee Prices Remain Firm on Tight ICE Coffee Inventories.
Barchart.com. https://www.barchart.com/story/news/9222316/coffee-prices-remain-
firm-on-tight-ice-coffee-inventories
Naidu, R., & DiNapoli, J. (2022, May 4). From Coffee to ketchup, retailers seek price "shields" as
inflation runs riot. Mint. https://www.livemint.com/news/world/from-coffee-to-
ketchup-retailers-seek-price-shields-as-inflation-runs-riot-11651662461015.html
Steffee, G. (2022). Coffee Capsule Global Market Report 2022. Www.reportlinker.com.
https://www.globenewswire.com/Tracker?
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