Aussie Oranges And Mandarins Case Study

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Supply Aussie oranges and mandarins’ major export markets include China, Singapore, Malaysia, United Stated, and Middle East. In Microeconomics, supply defined as the willingness and ability of sellers to offer. According to my research, Australia total citrus exports has increased 7.4% from 2015 to 2016 which means the overall supply of Aussie Oranges and Mandarins increased as well. Determinants of Supply of Aussie Oranges and Mandarins (What leads supply curve shifted) ------------- Number of sellers------------- The obvious profit growth has attracted growers to put their hopes on Aussie Oranges and Mandarins. This leads more and more people join to become growers (sellers). The rise of number of growers allow the supply to be expanded.…show more content…
There are many buyers and sellers in Aussie Orange and Mandarins. One firm’s supply is only a small portion of overall market supply; no firms have an extremely large market share to judge the market price. Hence, the firms are price taker and accept the price set by the forces of market demand and supply. All firms produced standardized breeds of products. Besides, Aussie Orange and Mandarins have freedom of entry and exit the industry. Daily Juice, well-known Australia company which produce Orange juice. Although they have a relatively larger portion of market share, yet they are unable to stop new firms to join and hold existing firms from leaving the industry. Aussie Oranges and Mandarins growers sell and produce identical breeds of fruits. I took Costa Company and Mildura Fruit Company as example. They are Australia largest grower and exporter. They sell homogenous products, so some of the buyers have no preference buy from which company as the fruits produced under same breeds. Identical Varieties in Costa Company Mildura Fruit Company (MFC) Mandarins Imperial, Afourer, Murcott, Clementine Clementine, Imperial, Murcott,…show more content…
Due to branding image, packaging, food safety certification and other reasons, there have portion of buyers favor and prefer in Aussie Oranges and Mandarins. Some buyers would think that Mildura Fruit Company (MFC)’s product is irreplaceable. ----------- luxury or necessity ----------- Luxury goods such as jewelry and exotic vacation, it takes large proportion of spending, demand is relatively elastic. For necessities such as food, fruits that fulfill nutrition to human body. Unlike luxury goods, people would not sharply increase consumption of Aussie Oranges and Mandarins due to minor drop of its price. ----------- Proportion of income spent ----------- According to World Bank, China’s Gross National Income per capital was USD 8,260 at 2016. In China, one box consists 9 Navel Oranges from different quality were estimated around USD 3.99 to USD 8.99. Let estimate buyers consume 1 box of Navel Oranges per 2 months (6 boxes consumed per year). Expenditures on Oranges per year (in percentage) was estimated around 0.0029% to 0.0065%. As the result, we can see it occupies less proportion of income spent, buyers will not very sensitive to its changes of
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