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09-02-2018

           Life Project into Soft Drink Manufacturing in Australia Industry

1.Table of contents and referencing

Your project must provide a table of contents, references and any appendices, if required. These do not count towards your word limit.

Students are required to acknowledge all sources of information and to include a bibliography of cited texts.  For guidelines on referencing, see a document on blackboard titled, “Guidelines for Referencing.”

Note that failure to acknowledge sources and to properly reference information will result in the material not be included in your assessment or a mark deduction for the question.

Students are to use their own words to demonstrate understanding of the economic theory and its application.

  1. Work Requirement:

The project accounts for 25% of the total assessment for this course and should be no more than 1700 words.

PROJECT GUIDELINESS

Project Overview

This project provides students with an opportunity to research into life microeconomic aspects of the Soft Drink Manufacturing industry in Australia.

The aim of the project is to give students an opportunity to apply microeconomic concepts and tools covered in class to a practical context.

Project objectives.

This project covers the following course learning outcomes:

CLO 1: understand the basic microeconomic problems facing society 
CLO 2: understand the interaction of demand and supply in the market place
CLO 3: demonstrate some familiarity with sources of business data
CLO 6: have an awareness of the possible causes of market failure and the role of the government
CLO 7: understand concepts and analyse problems, both numerically and diagrammatically, rather than attempting to memorise and quote correct answers
CLO 8: be able to apply simple microeconomic theory, using appropriate techniques, to some practical problems.

PROJECT TASK

Scenario

You are a Freelance Economics Consultant who has been commissioned by the Commonwealth Government to analyse the state of affairs in the industry of Soft Drink Manufacturing in Australia and report your findings to the Government.

Task

Access the IBIS World report on the industry of Soft Drink Manufacturing in Australia and answer the questions below, in your own words.

To access the IBIS World Report, go to RMIT’s home page. Then select ‘Library’ and launch ‘Databases A-Z’. After this, select the popular database of ‘IBIS World.’ Once in the database, search for ‘Soft Drink Manufacturing in Australia.’

1. Overview and Market Structure

  1. Provide a brief overview of the industry i.e. a definition of this industry, its products and main activities.                                                                                                            
  2. Identify the market structure of the industry.  Explain how you reached your decision using economic theory.                                    

2. Demand and Supply Analysis

  1. Using demand theory, analyse three relevant conditions (determinants) of demand that are prevailing in this industry.                                                                             
  2. Using supply theory, analyse three relevant conditions (determinants) of supply that are prevailing in this industry.                        

3. Market Analysis

V.  Analyse how the demand and supply of Soft Drink Manufacturing is likely to change in the next few years. Illustrate your answers with one graph showing the initial and final situation and the impact on price and quantity.

VI. Elasticity

  1. Using economic theory and facts determine whether the demand for Soft Drink Manufacturing is elastic     or  inelastic.  Explain your answer.
  2. Would a significant increase in the price of fast food have any impact on Soft Drink Manufacturing? Explain.

     VII.Government intervention

List and discuss three relevant examples of government intervention in the market for Soft Drink Manufacturing and the impact each intervention has on firms and final consumers.         

Further Analysis of the Market

  1. In your opinion, explain whether you believe there is any type of externality present in the Soft Drink Manufacturing industry.  If an externality is present, describe what action is available to the government in order to eliminate the externality.  Illustrate, where possible, both situations using two graphs – one showing the unregulated market and the other showing the government intervention.
Download Questions

The Soft Drink Manufacturing industry faces negative Externality. This is owing to the fact that the products related to Sugar are usually addictive in nature. Addiction usually results in making the person crave for the product more. These carbonated soft drinks are usually not good for health. Too much of consumption of it can make a person overweight. Addiction usually results in creation of inelastic demand on the part of such addicted customers (Abs.gov.au, 2017). The Government is usually in possession of a number of alternative options that would help it to curb the externality level to some extent. the price of consumers has increased significantly from Po to Pc while the price of the manufactured has barely remained unchanged at Pp. The tax burden mostly falls on the consumers while the quantity manufactured remains almost unchanged.

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