ACJC 2023 Market Structure Tutorial Worksheet

©ACJC Econs Dept/2023/H2 Firms and Decisions Tutorial Worksheet 1 ANGLO-CHINESE JUNIOR COLLEGE JC1 Economics H2 FIRMS AND DECISIONS Tutorial Worksheet 4 Section A: Problem Based Learning Market Research Project For this assignment, you will be working into groups (your tutor will assign). As a group, conduct market research on one of the following markets (one market per group):  Bubble tea in Singapore  Fast food in Singapore  Supermarkets in Singapore  Telcos in Singapore  Donuts in Singapore  OR any other market your group is interested in (check with your tutor for approval). You will need to research on the following for your chosen/assigned market: Part 1: Characteristics of the Market  Approximate number of firms in the industry  Top 3 firms in the industry (by market share, size, or any other measure)  Barriers to entry: what do you think a new firm would need to join the industry?  Comparison of product across different firms: how similar or different are the products? Part 2: Behaviour of Firms in the Market:  Approximate price of a similar product for 5 different brands (unless there are fewer than 5 brands):  Strategies used by the firms to increase profits, where profit = revenue - cost (include relevant images if possible) To conduct your research, you can use online tools such as search engines or Chat GPT. You can also do field research and head down to the retail outlets. Deliverable:  A 5 minute presentation on your findings in class.  You should use a visual aid for your presentation, such as Google Slides or Canva.  You can choose to do either an oral or video presentation.

©ACJC Econs Dept/2023/H2 Firms and Decisions Tutorial Worksheet 2 Section B: Discussion Questions Question 1: Delivery sales drive up revenue of eateries Mr Arif Salahuddin, founder of Michelin-rated Bismillah Biryani Restaurant, teamed up with food- delivery platforms such as Deliveroo and Foodpanda last September. His revenue is up 17 per cent. Within minutes of turning on the Deliveroo app last September, the restaurant had multiple orders. The boost to his restaurant’s sales prompted him to employ more staff and invest in larger ovens and machinery. This allowed him to delegate his staff to do special ised work and the use of machinery also increased their productivity. But Mr Salahuddin said that while 15 per cent to 20 per cent of revenue now comes from delivery, they are still hesitant to rely on it as delivery sales can fluctuate daily, based on factors such as the number of riders and weather. The commissions charged by food delivery partners can range from 20 per cent to 50 per cent, depending on sales and the number of outlets. Mr Andrei Soen, founder of Park Bench Deli, acknowledged that the commissions lower profit margins, but said that as delivery m akes up a fraction of his sales, his margins are not significantly affected. He added that the delivery platforms have strong marketing campaigns that reach out to customers, and provide data analytics, which has been useful as he is deciding the location of his next outlet. Adapted from The Straits Times, 11 April 2017 a. With reference to the extract, explain the difference betwe en variable cost and fixed cost to the restaurant owner. b. Explain the possible types of cost saving that a restaurant owner could enjoy. c. Consider whether a restaurant owner should engage a food delivery company or set up its own delivery service to increase its sales. Question 2: Internal Economies of Scale & Shut-down condition (Adapted from 2021 A-Levels Case Question 1) Extract 1: Barramundi Asia rolls out ambitious growth plan Singapore-based Barramundi Asia has big plans for growth. The company farms the barramundi fish in deep seawater off Singapore's southern isles, as well as around the Islands of the Kimberley off northern Australia and a new farm set up in Brunei's waters. The company is working to scale annual production up to 50000 tonnes of barramundi by 2030. Barramundi Asia uses hi-tech automated farming processes, harvesting when its fish get to four to five kilograms in size. 'The overwhelming growth in fish farming for the future is still here in Asia,' said the chief executive officer (CEO). 'Singapore is an international financial hub, and has proximity to our key business activities in Brunei and Australia as well as our local research and development sites.' Currently, the company's production is around 4000 tonnes, with around 700 tonnes produced in Singapore and 3000 tonnes produced in Australia. It makes around SG$20 million in annual revenue not enough to make it profitable yet. But that is due to the company's aggressive growth plans for the next ten years. By expanding its operations across its three farming sites, Barramundi Asia says it is on track to produce more than 11 000 tonnes of barramundi fish by 2023. And that could grow by even more if the company adds more new farms.

©ACJC Econs Dept/2023/H2 Firms and Decisions Tutorial Worksheet 3 Because of the geographic distance between its farming operations, Barramundi Asia has found it makes both logistical and financial sense to own and operate its entire sup ply chain: breeding and processing the fish, managing the farms, as well as running a sales and marketing operation. Barramundi Asia says it can produce its own vaccines and has methods of farming barramundi fish from small fry to fully -grown fish, as we ll as a sophisticated sales and marketing operation with online shops, home delivery and a strong brand. It also now has genetics expertise, after starting to work with Temasek Life Sciences, a non -profit organisation specialising in fish genomics and breeding programmes. 'Can we get to 50 000 tonnes? I believe so. It's not going to be easy but we're quite confident,' said the CEO. 'I do believe we have the capabilities in place to deliver on our expansion plans. I'm very high in confidence we can make it happen.' Source: SeafoodSource, 28 January 2020 a. Explain how Barramundi Asia’s plan to increase its scale of fish production i. can result in cost-savings ii. affects the firm’s price setting ability Extract 2: Shrinking prospects for shrimp farmers as India faces a global slump The cascading effects of the Covid-19 (coronavirus) pandemic in 2020 have had a striking impact on shrimp trade in India - farmers of the shellfish have been losing their livelihoods, and experts are expecting more disruption to come. Around 80 per cent of all farmers in the village of Baguran Jalpai, which is close to the Bay of Bengal, have switched to shrimp farming recently because of relatively high revenues. But fears of losing all their hard -earned income at a single stroke have been growing with the spread of Covid-19. Sunil Mahata, a shrimp farmer who lives in the village, expects heavy losses if the situation doesn't change in the next few months. 'I invested around US$6500 for 200 000 tiny shrimp just ten days before India's lockdown was announced. I have to spend money on feeding the shrimp and also on medicines for my family.' An exporter said 'India's shrimp production will not be the same as before, as farmers have become reluctant to invest in shrimp because of the situation with the pandemic - many will leave the market. The shrimps farmed in India are mostly used in hotels and restaurants across the globe, and the whole hospitality and dining sector might take a hit if the pandemic keeps customers away.' Source: The Fish Site, 23 April 2020 With reference to extract above, b. Explain how the small-scale shrimp farmers’ revenue has been affected. c. Explain the shut-down condition faced by firms in the short run. d. Explain why they took the decision to shut down production in the short run and leave the market in 2020.

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