Price Price differentials of differentials of

moon cakesmoon cakes

before and before and after after

Mid-Autumn Mid-Autumn Festival in Hong Festival in Hong

KongKong

Group members:Group members:

Jasmine Chan Jasmine Chan (2)(2)

Kennes Hung (5)Kennes Hung (5)

Elain Tsang Elain Tsang (25)(25)

Renee Angeline Yeh Renee Angeline Yeh (32)(32)

Dorothy Yung Dorothy Yung (34)(34)

Moon cakes• Moon cakes are Chinese pastries

traditionally eaten during the Mid-Autumn Festival

• The festival is for lunar worship and moon watching; moon cakes are regarded as an indispensable delicacy on this occasion

• Moon cakes are offered between friends or on family gatherings while celebrating the festival, one of the three most important Chinese festivals

Price Price DifferentialsDifferentials

September 20 or before $175 September 27 or before $200% increase: 12.5 %

During Mid-Autumn:During Mid-Autumn:

Moon cake is an inelastic good (Everyone needs it to celebrate the festival and it is expensive)

After Mid-Autumn:After Mid-Autumn:

Moon cake is an elastic good (The festival is over and the price is relatively low)

Demand and Supply Demand and Supply curves curves

During Mid-AutumnDuring Mid-AutumnMooncakeP

Q/T

D1 D2 S1 S2

P1

P2

Q1 Q2

-----------------------------------------

-------------------------------------------------------

---------------------------------

----------------------------------------

Demand and Supply Demand and Supply During Mid-Autumn During Mid-Autumn

• When Mid-autumn festival approaches, people’s demand for moon cakes increases. The demand curve moves from D1 to D2

• As so many people want to buy moon cakes, more moon cakes are produced. The supply curve moves from S1 to S2

• The price increases from P1 to P2

• The quantity increases from Q1 to Q2

• The total revenue therefore increases

Demand and Supply Demand and Supply curves curves

After Mid-AutumnAfter Mid-AutumnMooncake

P

Q/T

D2 D1 S

---------------------------------------------------

----------------------------------------------------------------------------

------------------------

P2

P1

Q1Q2

Demand and Supply Demand and Supply After Mid-Autumn After Mid-Autumn

• After people’s demand for moon cakes decreases. The demand curve moves from D1 to D2

• As people don’t want to buy moon cakes anymore, the supply doesn’t increase

• Price decreases from P1 to P2

• The quantity decreases from Q1 to Q2

• The total revenue therefore decreases

Different Different OwnershipsOwnerships

Private Ownership (Private Limited Company) Wing WahFeatures:•The company raises capital from existing shareholders•Need not to disclose financial statements to the public•Shares can be transferred with the consent of other shareholders•The shareholders are usually directly involved in running the business

Private Ownership (Public Limited Company) MaximFeatures:•The company raises capital by issuing shares and bonds•Need to disclose financial statements to the public•Shares can be quoted and traded in the stock exchange market•The shareholders are responsible for bearing risk

Our Our

questionnai

questionnai

re!!re!!

• We gave out 30 questionnaires• 30 people said that they would

buy moon cake before mid autumn festival

• Only 4 people said that they would also buy moon cake after mid autumn festival

SURVEY RESULTSURVEY RESULT

SURVEY RESULTSURVEY RESULT• 26 People said that moon cake was

only for festival celebration while the other 4 said that it wasn’t

• Only 24 people said that they love eating moon cake

• 14 people loves eating the traditional moon cake. 12 people loves eating ice-skinny moon cake. Only 4 people loves eating ice-cream moon cake

• 26 people said that they will still purchases the moon cake if it is expensive

• 18 people said that the flavors will change their mind in choosing the other brands of moon cake . 10 people said that the prices will change their mind. While 2 people said that the brand will change their mind

SURVEY RESULTSURVEY RESULT

SURVEY ANALYSISSURVEY ANALYSIS• Moon cake is a festival good• The degree of necessity of moon

cake is very high• Therefore it is an inelastic good

Almost everyone needs to celebrate the festival with this traditional good due to their traditional habit

SURVEY ANALYSISSURVEY ANALYSIS• Whatever the price rise, people will still

buy it• Different kinds of moon cakes have

different price which depends on human desire

• For some ice skinny moon cake and ice cream moon cake: they will will be more expensive

• However, people are not really concerned much about the prices, but they care about the flavors of the moon cake

Conclusion

• Moon cakes become higher in price during and before Mid-Autumn, but then become cheap again when demand becomes lower

• Thus, they follow perfectly the law of demand

Our FeelingsOur Feelings• This situation is just the normal

feature in a capitalist society

• Businesses, such as moon cake makers, aim to make the most profit

• So, if they change their prices according to demand, they can maximize their gain

ReferencesReferences

• www.yahoo.com.hk• www.kee-wah.com.hk/public/MoonCa

ke.html

• www.maxims.com.hk/mooncake/chi/index.html

• www.moon-cake.net • Magazine

THE END