Set up a yoghurt ice cream store after 'A' Levels Exam – PDG 2212 Group 5

Cost of Production

Higher cost of raw material (cost of milk increase due to high demand)

Higher production cost

Lower level of profit

Producers cut back on production and switch to alternative products

Supply of yoghurt ice-cream will fall

Prices of Related Products

Goods in Competitive Supply may be cheaper than Yoghurt ice-cream

Quantity demanded will decrease

Size of the industry

No. of producers

Andersen Ice Cream

McDonalds Ice Cream

My Dessert House

More producers

Increase in Supply

Decrease in Equilibrium Price and Increase in Equilibrium Quantity

Natural Factors

Mad Cow Disease

Cows die

Decrease in supply of milk

Higher price of milk

Increase in cost of Production

People will refrain from buying products made of milk

Consumers look for substitutes

Decrease in demand

Government Policies

Subsidies provided to manufacturing of ice-cream

Lower cost of production

Higher profit level

Higher supply of yoghurt ice-cream

At a higher price, a higher quantity will be supplied, ceteris paribus.

Income

Singaporeans getting wealthier

Consumers have higher income

Lead to higher purchasing power

Able to afford higher quality foods i.e. yoghurt ice-cream

Higher demand for yoghurt ice-cream

Population

Large population of teenagers (school area)

Young people like to eat ice cream and yoghurt

Demand for yoghurt ice-cream will increase

Tastes and preferences

Consumers becoming more health conscious

Consume yoghurt instead of normal ice-cream since it is beneficial to one's health

Demand will increase

Yoghurt Ice Cream is something new compared to three other ice cream stall in AMK Hub

Consumers would want to try something different

Demand will increase

Prices of Related Goods

Alternatives (Substitute Goods)

Price of normal ice-Cream decrease e.g. MacDonald's

Consumers switch from yoghurt ice-cream to ordinary ice-cream

Demand for yoghurt ice-cream decreases

Price of yoghurt ice-cream increases

Quantity demanded will decrease

Consumers switch from yoghurt ice-cream to ordinary ice-cream

Demand for substitutes increase

At a higher price of yoghurt ice-cream, a lower quantity will be demanded, ceteris paribus.