Answer to Question #304108 in Microeconomics for Ethan

Question #304108

Each group may choose to study and analyze one of the following primary markets in Malaysia.

(1) Palm Oil market(2) Egg market (3) Passenger car market
Use the past 10 years annual data collected for your chosen market/industry to answer the following questions:(a) Briefly describe the general background of the industry. (b) List out industrial production and labor employed over the last ten years. (c) Compute the labor productivity of the industry over the last 10 years. (Note: Labor productivity = Total output / Total labor employed)
(h) Do you think firms in this market exercise considerable controlling power?

Expert's answer

The choice of study is;

(2) Egg market

a) Eggy industry in Malaysia has seen exponential growth over the last 10 years. this was due to economic booms experienced in the 80's hence the egg industry has transited from backyard poultry into the modern production system it is today.

b) The Malaysian egg market is made up of about 96% brown eggs and about 2.5% tinted eggs. It can be concluded that egg production has increased steadily in the last 10 years. combination of slow population growth rate has led to decreasing labor force participation hence lower unemployment rate. this results in employment growth rate slightly stronger compared to previous years.

c) Labor productivity of the industry is calculated below;

The estimated output of eggs is 8,637,000 million while the estimated total labor employed is 452,167

"{8,637,000}\\div {2,052,167} = 4. 21"

d) Yes, because the companies relatively have the ability to manipulate the price of eggs in the marketplace by manipulating the supply level.