Question 1.

2 on Current Price and points to highlight Describe the current pricing in the following terms (Illustrate what you say with evidence and examples): a) What kind of competitive market situation does this product exist in? b) If there is a change in the price of this product what will happen to consumer demand? c) How important are the business costs when they determine the price for this product? d) Is the current price higher than competitors prices, lower than competitors prices or about the same as competitors prices? e) Do consumers base their purchase decision for this product on price or do they base it on the product image, features or quality? 1.2 Current Price In the current publication and magazine industry in Singapore, there exists a large number of firms, which offer similar but non-identical products. The nature of the products (magazines) are such that they may be similar in format (both hardcopy and online versions) and/or content, but may not offer exactly the same thing. There is generally freedom of entry and exit out of the industry, and each firm has some degree of market control. 1 In addition, product differentiation is essential as each firm faces a downward-sloping demand curve.2 For Style: magazine, there exists a The large number of competitors in the magazine publishing market industry other than its parent company Mediacorp, such as Singapore Press Holdings, ACP Magazines, and Expat Living Publications.3 These other firms offer offering similar products such as CLEO, Female magazine, Seventeen and Harpers Bazaar. Thus, striving to differentiate its their product through pricing, packaging and distribution from its other competitors are characteristics that indicating reflect how Style: magazine exists in a monopolistic competition structure. Style: magazine being distinctive from its competitors reflects that no available substitutes exist in the market, thus making the demand inelastic to its change of pricing. Moreover, the low price of Style: magazine takes up a small percentage of consumers income lowers the elasticity of demand. I only answered the a & b parts. can help me edit? Thanks. :)

Comment [LC1]: Should include the competitors names here, and how many there are roughly; also cite examples- I did it for u Comment [LC2]: Such as? I also added it in for u alr remember to keep the references cited in the footnotes.

Comment [LC3]: I dont know how to link the theory I mentioned earlier here but if u could do it that would make ur answer better? Formatted: English (U.S.)

Taken from http://www.amosweb.com/cgibin/awb_nav.pl?s=wpd&c=dsp&k=monopolistic+competition, accessed on 4 Aug 2012 , and www.econ.uiuc.edu 2 Taken from www.econ.uiuc.edu 3 This is according to the Magazine Publishers Association of Singapore. A more complete list of members can be found here: http://en.wikipedia.org/wiki/Magazine_Publishers_Association_of_Singapore
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