Microeconomics- Business Firm

This business firm is a firm that most of the individuals can afford to stay in with low rate as compared with other hotel and this hotel is called Sun Inns Hotel. Sun Inns Hotel is a Malaysia Budget Hotel with star-rated with comfortable, cheap and clean facilities provided. Sun Inns Hotel was established in 1997 and it started with the hotel in Bandar Sunway which was Mentari 1 and the headquarter was located at Subang Indah also near to Mentari 1. Besides that, the director of the organization soon found a places that will be suitable to build hotel so he started to build the second hotel which was Mentari 2. Now, Sun Inns group already expanded until 16 hotels in Peninsular Malaysia. Sun Inns Group is planning to expand many more budget hotel around Peninsular Malaysia.

Sun Inns Hotel is surrounded in all over Peninsular Malaysia for example Kuala Selangor, Ipoh, Puchong, Damansara, The Mines, Seri Kembangan, Cheras, Kepong, Kelana Jaya and Bandar Sunway. In the above mention places, there are few branches for it for example, in Bandar Sunway, there are already five branches already which are Sun Inn Mentari 1 and 2 and also Sun Inn Lagoon 1, 2 and 3. Besides that, the size of the business firm is average, not too big and not too small. Other than that, the type of economic goods produced by the hotel is services that can be provided to the customer that stay in the hotel.

Demand and Supply

There are many type of economic concept that we can apply it in real world as this economic concept we had been taught by teacher in high school. There are many examples that we can be apply with the concept that we have learn in the institution or secondary school. For each of the economic concept, it has its own definition so we can apply the economic concept with the example that we see in the world.

First, the economic concept that will be discussed in this weblog will be demand and supply. In economic book, it divides demand and supply topic into two parts which discuss about demand first then discuss about supply. Demand can be defined it as when you demand for something, then you will want it, afford it and lastly will be you have made a definite plan to buy it. In other word, the quantity demanded of a good or services is the amount that the consumers plan to buy during a particular time and at a particular place. For example, hotel industry can be used as an example for demand and supply.

There are two types of hotel in the world which is budget hotel and star-rated hotel. Hotel industry can be used to describe in this concept because for example the price of the budget hotel decrease will allow the quantity demanded for the rooms in the hotel increase. Other than that, for budget hotel, it will be more convenient for family that wants to save money for other things that they prefer. For example, parents like to bring their children to the nearest theme park that has a hotel nearby so that parents can bring their child to play in the theme park. Besides that, the price for the room in budget hotel is decided by the hotel management team, some hotel room rate will be cheaper compare to the other outlet and some will be at a higher rate. In other word, if demands for consumer to stay in budget hotel increase, then the quantity demanded for the room will increase. In addition, consumer’s wants is important for consumer to decide what to buy so it can satisfy consumer wants. Wants can be defined the unlimited desires or wishes of consumer. Not only that, demand can reflects a decision about which wants to satisfy their needs.

Besides that, the law of demand can be defined as things remain the same, this makes the price to be higher and the quantity that the consumer demanded to be lower. Furthermore, the lower the price of a particular goods, the quantity demanded will be higher. In law of demand, there are two types of result which are substitution effect and income effect. Substitution effect is defined as if the price of the goods increase then the quantity demanded decrease. For example, if the family wants to stay in a cheaper hotel then budget hotel is the best choice for the family. In this case, budget hotel is the substitution effect for consumer that wants to save money. Furthermore, income effect is change in price will affect the decision of the consumer to consume the goods. For example, if a family can only afford to consume for lower price hotel then Sun Inn will be a good choice for the family to stay in and it is affordable for lower income earner. In other word, if the demands for rooms in Sun Inn increase then this will affect the sales of the hotel to increase.

Furthermore, other than demand can affect the industry, supply also will affect the supply of the industry. Supply can be defined as how much that the firm can supply. In other words, supply can also be describe as if a firm supplies goods and services, the firm has a resources and the technology to produce, can generate profit from producing and lastly, the firm has plan to produce the product. Other than that, quantity supplied is the amount that the producers plan to sell during the given time and at a particular price. For example, if Sun Inn purchases the products from the supplier for example towel exceed the quantity that the supplier have, the quantity that the producer need to produce will need to increase. Not only that, supply reflects the decision about the technology that produce the item.

Besides that, the law of supply can be defined as things remain the same, this makes the price to be higher and the quantity that the consumer demanded to be greater. Furthermore, the lower the price of a particular goods, the quantity demanded will be lower. In law of supply, the result for it is from the general tendency for the marginal cost of producing a good and service to increase as the quantity produce increase. For example, if Sun Inn’s cost of producing a good and service to increase as the quantity produce which will be the towel increase because there are more consumer are using the towel.

Market Equilibrium

Other than demand and supply, market equilibrium also another concept that have been taught in institution. Market equilibrium can be defined as markets occurs when the price and quantity of goods is the same as buyers and sellers. Other than that, equilibrium price is the quantity demanded equals to the quantity supplied. Market equilibrium is established when the price is higher than the quantity and this makes a surplus of the industry. If the market wants to meet market equilibrium, the quantity demanded must increase and quantity supplied must increase then it will meet the market equilibrium.

Conclusion

To sum up, there are many more economic concept that we can learn and apply it with the example that we can think of. Other than that, economic concept not only demand and supply, it also have other economic concept like elasticity, perfect competition and many more economic concept that we have learn in the institution. Therefore, economic need to memorize all the concept when we face problem then we can apply it with the economic concept that we have learn.

Reference List

Anon (2013) Economics Basics: Supply and Demand. Available from: http://www.investopedia.com/university/economics/economics3.asp [Accessed: 16 October 2013]

Anon (2013)Income and Substitution Effects. Available from: http://www.sparknotes.com/economics/micro/supplydemand/demand/section2.rhtml [Accessed: 22 September 2013]

Anon (2013)Market Equilibrium. Available from: http://www.economicsonline.co.uk/Competitive_markets/Markets_equilibrium.htm [Accessed: 19 October 2013]

Brue,S.L , Flynn,S.N, Mcconnell,C.R (2012) Economics, Global Edition:Principles,Problems and Policies 19^th ed. United States of America. [Accessed: 12 October 2013]

Parkin,M.(2012) Economics 10^th ed. England. Pearson. [Accessed: 23 September 2013]

Sloman,J., Wride,A., Garratt,D. (2012) Economics 8^th ed. England. Pearson. [Accessed: 12 October 2013]

Sun Inn Hotel (2008) Promotion Rate. Available from: www.suninnshotel.com.my [Accessed: 30 September 2013]

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