Read the article written by Eliza Mcphee “Lobster prices fall as Chinese demand dries up amid coronavirus epidemic -and the delicious crustaceans can be snapped up for just $33” published in Daily Mail dated 4th February 2020(Appendix). Then answer these questions as part of your responUO Principles of Economics1.Using the demand and supply model, explain and illustrate the effect of coronavirus outbreak on the market for lobsters in Australia. Hint: Make sure you discuss the equilibrating process, and clearly outline the assumptions in discussing the factors causing change in price and quantity. 2.Use the determinants of price elasticity of demand to analyse whether the demand for lobsters is likely to be price elastic or inelastic. 3.Based on your analysis in question 2, explain and illustrate graphically what will happen to the total revenue of the fishing industry following a decrease in price of lobsters. The framework for your answer should be to•Introduction•Identify the key issue in the questions provided•Analyse these key issues in the news article, within the context of the concepts discussed in the lectures and textbook•Use the appropriate economic model to illustrate the key issues graphically. Fully label the model and clearly indicate where changes occur•Explain the model and discuss the outcome•Conclusion•Provide the list of references used in answering the questions.Part A will be assessed on your understanding of the demand and supply model, the determinants of elasticity and total revenue and writing and formatting. Make sure you use appropriately labelled diagrams in your analysis.A detailed rubric explaining how your work will be assessed is available in the Assessment 1 resources folder. Case Study - Part A contributes 25% towards your final grade.
Lobster prices fall as Chinese demand dries up amid coronavirus epidemic - and the delicious crustaceans can be snapped up for just $33
Daily Mail
Eliza Mcphee
4th February 2020
https://www.dailymail.co.uk/news/article-7963755/Lobster-prices-fall-Chinese-market-shuts-amid-coronavirus-epidemic.html
Australians can buy lobster for as little as $33 as prices fall due to demand dropping from China in the wake of the coronavirus epidemic.
China is one of the biggest buyers of Western Australia's rock lobster but due to the closure of the Chinese live animal trade, fishing industries are fearing the worst.
There are now tonnes of the crustacean sitting in holding tanks, forcing industries to sell them at reduced prices.
The Geraldton Fishermen's Cooperative (GFC) were expecting the Chinese New Year period to be their busiest time with around 50 to 60 tonnes of lobster being handled each day.
But CEO Matt Rutter said they have taken a massive blow in the wake of the market closure and fear it will be some time before it reopens.
Lobsters that once sold for $48 are now selling for $15 less.
We are estimating that we have a month's worth of western rock lobster that we will continue to sell out of WA,' Mr Rutter told the ABC.
He said there was a few hundred tonnes that had been shipped before the market shut down - with the western rock lobster making up a large proportion.
Mr Rutter said that despite the low prices for consumers, staff and fishermen within the industry were at a loss.
'Because we don't have product flowing through the door, we don't have trucks driving or people at the depots receiving … a lot of the staff that would normally be carrying that out have unfortunately been told to stand down until the product starts flowing again,' he said.
'It's not just the fishers who are hurting, but everyone who relies on the industry for income.'
GFC can hold 220 tonnes of lobster in refrigerated seawater storage tanks that keep them from four to six weeks.
Mr Rutter said the industry will continue to use other international markets like Japan and the USA.
There have been 12 confirmed cases of coronavirus in Australia, and more than 17,000 cases and 360 deaths globally.
Daily Mail