S UNIVERSITI TEKNOLOGI MARA Eco 162 MICROECONOMIC. TTL RITTEN REPORT (SMARTPHONE) GROUP : KBA1192D NAME STUDENT ID NUMBER NAJWAAYUNI BINTI NORLIZAM 2020849524 AMERAATHIRAH BINTIAMER REZAL 2020800252 NISA BATRISYIA BINTI ROSLI 2020848098 AFIZA EDURA BINTI JEFRI 2020451918 AMIRAH NUR ATHIRAH BINTI AMERONZAKI 2020887168 MUNIRAH BINTI AHMAD ROSLI 2020452142 SUBMITTED TO : MISS SHAHISZAN BINTI ISMAIL SEM : Mac— Jul 2021 ‘TABLE OF CONTENTS: Scanned with CamScannerNo. CONTENT PAGE 1. | INTRODUCTION 3-5 2. |2.0 SUMMARY OF MICROECONOMIC ISSUE - BASED ON MIGROECONOMIG CONCEPTS 2.4 ANALYSIS OF DEMAND 6-14 2.2 ANALYSIS OF SUPPLY 2.3 ANALYSIS OF MARKET EQUILIBRIUM 3. | EFFECT OF COVID-19 TOWARD SMARTPHONE 15 4, | CONCLUSION 16 5. | REFERENCES 7 1.0 INTRODUCTION 21Page Scanned with CamScannerNowadays, the use of smartphones is becoming increasingly popular among Malaysians. Based on the passage of this sophisticated age, smartphones have become a necessity for everyone because smariphones have many uses. Smartphones have more advanced computing and connectivity features compared to regular mobile phones. These smartphones have also influenced many layers of society to follow current trends. Not only adults and teenagers are using these smartphones but children are also using them because they have a fot of benefits in their daily lives. Without smartphones we are unable to ‘communicate with our family or even our friends that live far away from us, We can use smartphones to send a chat and make a video call through applications Ike whatsapp, telegram, facebook and also telegram that allow people to instantly communicate to ‘everyone across the world. Smartphones are very useful 1o people since they will be able to find out about what is going on around the world and at the same time it is very helpful especially for students to get more information and improve their knowledge. addition, people also use smartphones for their entertainment like watching a movie on Netix, listening to music on Spotty, posting photos about their daily lives on Instagram, playing games, reading various types of books through Watipad. Manga and so on. From that they will release their stress from work and school during the day, Not just thal, smartphones also allow the public to read the online newspaper. This smartphone also can be used as a device for taking pictures as its functionality is also comparable to a 3|Page Scanned with CamScannersophisticated digital camera. The pictures that we snap will be the most beautiful memories that we cannot forget because every event that we experience will never be repeated and it will be a memory. Nevertheless, smartphones do have a disadvantage that sometimes, people do not realize that it will give them a bad effect if they do not control how they use and how much they use smartphones in their daily lives. Most of these disadvantages are heavily influenced by teenagers as they follow the latest trends. There are a lot of disadvantages, which Is that smartphones can spread fake news easily. To those who easily believe without making an Investigation first easily spread to others without Investigating the authenticity of the news. Such as, many people are spreading fake news related to Covid-19 which is not released by the Malaysian Ministry of Health. They are naving a fun spreading a fake news about Covid- 19 but did not reallze that they are alreacy make people fee's anxious and scared about the news until there are some of the clvilians who trying to commit suicide because they are having a stress with surrounding situation that happen in our country, now days. Pra in In other words, since pandemic Covid-19 smartphones have been widely used to obtain information related to the daily cases of covid-19. Therefore, the government has set up an application that has @ lot of info about the Covid-19 which is the "My Sejahtera" application. Everyone is obliged to have the app in their smartphone as this app will store all their information. For example, this "My Sejahtera” app will be used when someone wants to 0 to the supermarket and they need to scan the QR Code that has been set. This will make it easier for the hospital to detect anyone infected with the virus of Covid-19 because people need to answer the questions that are related to their health in the “My Sejahtera" app so 4|Pago Scanned with CamScannerthat they will protect themself and elso people around them from infected with the virus that even they did not know if the virus are close to them or not so the app is like one of their protection in this pandemic. Equally important, this application in the smartphone also used toregister the Covid-19 vaccine. Covid-19 vaccine was given to control the spread of Covid- 18 in the country. Hence, “My Sejahtera” application is important in our smartphone because there |s a lot of information about us, such as our identity card number and about our Covid- 19 status that are very helpful and useful during this pandemic situation. Desptte that Covid- 18 has also had @ major impact on declining smartphone production due to the many of smartphone’s manufacturers have to close down their factory and not able to produce it because they are lack of raw materials. 2.0 SUMMARY OF MIGROEGONOMIC ISSUE — BASED ON MICROECONOMIC CONCEPTS 5|Page Scanned with CamScanner2.1 ANALYSIS OF DEMAND People demand goods and services in an economy to setisfy all their desires. In economic, demand is determined as the capacity or in other name which is purchesing power and the willingness of consumers to pay for the said goods and services at different possible price levels, place and time range. In law of demand, t describes that quantity Purchased varies contrary to price. In other words, the lower the price, the higher the quantity demanded. The demand of products are influenced by many factors. Here are some determinants of demand that will affect the demand curve which shifts leftward or rightward. 1) Price of smartphone There are many determinants of demand. One of them is the price of the goods themselves. When the price of the goods changes, quantity demand will change too and it will cause a motion through the same demand curve, For instance, when smartphones’ price decreases, quantity demand will increase and vice versa. Price ° ar ‘Quantity Diagram 4 Change In the price that cause a change In quantity demanded Diagram 1 above is an example of a change in the price that causes a change in quantity demanded. It shows that smartphones' prices decrease from P1 to P2, while Qt Incroases to Q2 at the quantity demanded. This is because, during the pandemic Covid-19, all students ere forced to switch to online distance learning due to the increasing cases of Covid-19 every day. Consequently, hero will be an expansion in demand. il) Consumers’ preferences | Page Scanned with CamScannerAside from that, consumers’ preferences also are the elements that influence the quantity demanded of smartphones. One's preferencas or tastes are influenced by the types ‘of promotions that attract customers to buy the products, the changes in trends that have gore viral In social media, seasons and so forth. Changes in tastes will create a change In demand, Increase in demand leads the demand curve to shift to the right that shows favorable changes in customers’ preferences. There are many factors that the consumers ‘chango their tasies such as tho qually of the smartphones, the battery that can last up fo 11 ‘and 13 hours, recommendations of family and friends, the price itself. Diagram 2 Change in Demand When Consumers’ Preferences Change Diagram 2 above shows the change in demand when consumers’ preferences change. With the price of smartphones remains unchanged at P1, the quantity demanded will decrease @1 10 Q2. Al the diagram, D1 shifts to DZ that shows a dectease in demand and it leads the demand curve shift to the leftward. For instance, when consumers change their smartphone preferences, from Iphone to Oppo, these consumers will demand more of the Oppo smartphone, Ill) Prices of related goods T|Page Scanned with CamScannerOther than that, prices of related goods are one of the faclors that influence demand. An example of related goods is substitute goods. Substitute goods are goods that have the Same purpose or same use such as substitutes good for Oppo smartphones is Huawei tablets. When the prices of Oppo smartphones increase, the demand for Huawei tablets will increase too. Diagram 3 Change in Demand When Price of Huawei Tablets Increases Diagram 3 shows the change in demand for Oppo smariphones when the Price of Huawei Tablets increases. Q1 shift to Q2 at the quantity demanded shows an increase for Oppo Smartphones while the price being constant at PO. It shows an increase in demand when D1 shifts to D2 that leads the demand curve shift to the rightward. 8|Pago Scanned with CamScanneriv) Consumers’ expectations of future price ‘The fast factor influencing the changes to the demand curve is consumers’ assumptions of the price in the future. For instance, if one speculates that the price of smartphones will increase in the near future, the person will buy a smartphone now in order to avoid paying more later, Hence, the demand for smartnhones will increase and this situation may shift rightwards of the demand curve temporarily. Diagram 4 Change In Demand When Consumers’ Expectations of Future Price Change Diagram 4 above shows the change in demand when consumers’ expectations of future prices change. With the prica remains unchanged in PO, Q4 shifts to Q2 that shows the quantity demanded for smartphones increases. The demand curve shift to the right from D4 to D2, shows the demand is on rise. One good example is when you know the price of smartphones will increase in the future, then you wil buy it now to avoid paying more. a|Page Scanned with CamScanner22 ANALYSIS OF SUPPLY Supply is associate degree economic term that refers to the amount of 2 given product or service that suppliers are wiling to supply to customers at a given price level at a given amount. 1. Technology improvement Technology may be a main issue of supply for smartphone. Nowadays, technology has nice and wide capabilities in producing new products and modify the product to be of upper quality. a new improvement in technology can improve productivity potency. pa Based on the graph, there is an increase in supply. Onoe a firm discovers a new technology that enables it to produce at a lower price, it will build the supply curve will shift to the right. The quantity the price for smartphone will increase from Q1 to Q2 whereas the worth of the products remains unchanged. They will produce the smartphone in they can quantities while not employing a lot of workforce or employees. Technology improvement will reduce the inputs prices of production. If the cost of production goes down, and customers can demand a lot of the product at lower costs. 10|Page Scanned with CamScannerli, Price of the smartphone Price is also one amongst the factors that influence the sunply of smartphone. The law of supply states that once the price of a goods itself increases, the number the quantity for the products will increases and once the price of the good decreases, the quantity supplied will decreases. In different words, the law of supply shows a positive relationship between the quantity supplied and therefore the price of the good itself. Price PL Qi 2 Quantity Supplied ‘As shown vithin the graph on top of, modification in price and amount supplied is shown by a movement along the supply curve the price of smartphone will increase from P1 to P2, the quantity offer of smartphone additionally wi amount supplied expansion as growth in supply. \eroase from Q1 to Q2. the rise in [Page Scanned with CamScanneriii, Producers’ Expectations of Future Prices In comparison to the value of the products, varied factors will influence the supply curve shift. The supply curve can move to the right or left once these conditions are present. One among the problems is producers’ expectations for future smartphone costs. If Producers pradict that the worth of smartphones can rise in 2022, they'll manufacture fewer smartphones in 2021. As a resutt, the supply curve can shift to the left because the supply of | Graph shows charwes In Suppty Curve when = | Producers Eapect Future Prices ef Smartphones jE ery smartphones decreases. The graph above illustrates how the whole supply curve shifts showing the results of producers’ expectations for future smartphone costs. When producers predict the value of smartphones to extend within the future, they'll create fewer smartphones currently. So, even ‘once the value remains at PO, the amount equipped has diminished from Qo 0. @1. From SO to S1. the supply curve moves to the left. Iv. Government Regulation and Taxes 121Page Scanned with CamScannerPreviously, all smartphones sold in Malaysia were subject to a 6% GST. Once the GST rate on smartphones will increase, ill undoubtedly increase the value of produ smertphiones. Then neither suppliers nor producers can create plenty of cash. AS a ‘sonsequence, the avalabiity of smartphones Is decreased. Graptshows changes In Supply Curve when GST on smartphones Increases. ‘The graph above displays how the whole offer curve shifts because the GST rate on smartphones will increase. The amount provided decreases from QO to Q1 because the worth remains constant at PO. From $0 to $1, the avaliability curve shifts to the left. 2.3. ANALYSIS OF MARKET EQUILIBRIUM. 13/Page Scanned with CamScannerBuyers and sellers meet together to make decisions on the goods and services ta purchase and sell in the market. Communication is a major thing for buyers and sellers to decide the equilibrium price and quantity of goods in a market. Therefore, quantity demanded equal to quantity supplied is @ condition in market equilibrium. Once the market equilibrium has been archived, there would be no tendency for the price and quantity to change. Otherwise state that market equilibrium is a situation when buyers are willing to purchase goods and services while sellers are willing to sell the same goods and services at a given price. Basically, there are four situations that lead to changes in demand and supply and will affect the market equilibrium. One example of the four situations is demand decreases, supply increases. Price — a> Quantity atza0 Diagram 5 Market Equilibrium of Smartphone Diagram S illustrates thet the demand curve of smartphones shift to the left from D4 to D2 because consumers’ praferences decreasa. Supply curve of smartohonas shift fo the right from $1 to $2 due a technology improvement in the market. Hence, the equilibrium price will fall from P4 to P2 while the equilibrium quantity remains unchanged at Q1 = QO. This diagram perfectly demonstrates the demand decreases and supply Increases at the same proportion that affect the curves sequentially ‘The calling price or known as maximum price that set for smartphones is RM700 which is lower than before due to Covid-19 pandamic in Malaysia. During Movernent Control Order (MCO), students are instructed to learn from home and smartphones are @ needed device for them. This is the right time for parents to buy smartphones because they can save their budget. Maximum price will help the lower income group to buy smartphones for their kids to join the online leaming classes that are held by teachers. For the time being, Covid- 19 is causing shortages of smartphones due to quantity supplied lower than quantity demanded. 14|Page Scanned with CamScanner3.0. EFFECT OF COVID-19 TOWARDS SMARTPHONE Since the covid-19 epidemic hit our country, many industries have been affected, but It also has postive and negative effects. As Covid-19 spreads around the world, it has a significant economic impact on smartphone manufacturers. Mest of the societies currently lack sources of income during this pandemic so demand for new phones have fallen down a lot. This is because they need to prioritize the essential needs to feed themselves during these hectic times. In the face of econcmic hardship. people are unlikely fo purchase a new phone unless they absolutely need one. So when the demand of the smartphone decreases, the supply of the smarlphone will decrease too, it will cause the smartphone production company to incur losses. Therefore, many of the factories that manufacture these smartphones have been shut down due to very severe losses. Decrease in revenue and shutdowns over health concerns have severely obstructed smartphone production. Many of the smartphone manufactures are now worried about this situation that at any times they will lose alot and shut down their company. ‘As we can see nowadays, in our country smartphones are more important during the pandemic Covid-19 because most of the students use smartphones to join their onfine classes and sometimes they need to take their exam via smariphones. Despite this dropping production and sales decreased, smartohone usage has increased more than usual. People use it all the time, especially during this pandemic in Malaysia. We are required to have a smartphone to use “My Sejahtera" apps to enter any Supermarket, Hospital, Shopping Mall and many more. Many businesses are now only relying on instant messaging to talk and discuss about their business and people that have been quarantined also need a smartphone to get rid of their boredom at home. During the Movement Control Order (MCO), many of these smartphone stores were closed due to prevent the spread of this Covid-19 virus. This will cause the small shops that sell smartphones to lose revenue to them. Not only that, they also did not get the stocks of such smartphones by much as there were many factories that had lo close due 'o losses from this Covid-19 pandemic there are standard operating procedures (SOP) that traders have to follow. Not just that, the manufactures also are struggling to meet the demand of people and to get the necessary raw materials needed to produce the smartphones. Some people also might lose their jobs too due to the many factories and gadget stores having to close down because of these issues. This has shown that Covid-19 has a detrimental effect on smartphone production in the world, especially in our country The sale of these mobile phones cannot be carried out as 15|Page Scanned with CamScanner4.0 CONCLUSION ‘As a wiap up of all that has been said above, it may be concluded that smartphones really play an important role in our lives. Smarthones not only can be used to communicate with people but at the same time it also can get the latest information related to Covid-19 which is hitting the country right now. People can get updates about their health through smartphones using the “My Sejahtera’ application so that if they notice that they are not feeling well, they will go to the hospital to do the swab test and get quarantined at their home from spreading the virus to people especially during this pandemic. Based on the current Covid-19 pandemic, this smartphone is also influencing demand and supply curve in the current market. What we can see, if the price of ‘smartphones decreases, the demand for smartphones will increase and vice versa. It is, because the price is cheaper than the price of the first release and many people will be interested to buy it Not only that, this will also relate to supply which is when demand increases, he supply for the smartphone will increase too but due to the Covid-19 pandemic the production of smartphones could not be produced in large quantities because there were factories that had closed because they suffered losses. Communication is a major thing for buyers and sellers to decide the equilibrium price and quantity of goods in a market but ba ally there are four situations that lead to changes in demand and supply and will affect the market equilibrium. This shows thal due to the Covid-19 pandemic, the demand and supply of smartphones keep increasing day by day because of its extensive use to people nowadays. ear) y RRR aly (12.11)% Reece 16|Page Scanned with CamScanner