Explain and illustrate how the increase in market rents

Reference no: EM133487336

Question: 'How much longer can that satay', The Economist, May 16, 2015. "The main problem is that Singaporeans have grown used to paying prices that the market can no longer bear. When the government moved the first generation of hawkers off the streets and into fixed locations with electricity, clean running water and regular hygiene inspections, it kept rents artificially low as an incentive. Roughly half of the 6,258 government-managed stalls pay rents as low as S$160 ($120.80) a month. The other half, however, must pay market rates, which can exceed S$4,100 a month. These stallholders must compete with each other.... But with the first generation of hawkers retiring and their replacements paying market rents, food prices will certainly rise...."

a) Assume the market for hawker food in Singapore is imperfectly competitive and that the market is initially in both short and long run equilibrium. Explain and illustrate how the increase in market rents affect price, quantity traded and profit for the firms in the short run?

b) Explain and illustrate how the increase in market rents affects price, quantity traded, and profits in the long run.

Reference no: EM133487336

Questions Cloud

Explain which funding mechanism states prefer : Describe block grants, categorical grants, and unfunded mandates. How do they demonstrate fiscal federalism? Explain which funding mechanism states prefer

What is your position on diversity in the workplace : Discuss what is your position on diversity in the workplace? How would you describe your attitude toward diversity? Be detailed in your analysis.

How can they be applied to business : The topic is What are the virtues according to Aristotle, and how can they be applied to business?

Eastern and western philosophers believed that to preserve : Some Eastern and Western philosophers believed that to preserve oneself is a collective effort that involves being able to know how to help or love others.

Explain and illustrate how the increase in market rents : Explain and illustrate how the increase in market rents affect price, quantity traded and profit for the firms in the short run and Explain and illustrate

Why do you think countries in africa have anti-lgbtq laws : Why do you think countries in Africa and the Middle East tend to have some of the the strictest anti-LGBTQ+ laws in the world?

How to resolve conflicts in team management : How to resolve conflicts in team management ? How to apply Conflict Management Styles to Resolve Task Conflict and Enhance Team Innovation?

Why is the storage of biometric data safer : If an attacker has your fingerprints, could multifactor authentication (MFA) still prevent the attacker from gaining access to your accounts? Why or why not?

Write who is responsible for this activity in scrum : Please be specific. Next to each activity please write who is responsible for this activity in Scrum and explain why.

User Account

All Pages