Fresh fish, it is
something that we're accustomed to here in Malaysia. Fish in Malaysia is one of
our staples for protein, either cooked in our favorite sweet and sour sauce,
steamed with ginger and oyster sauce or made into otak-otak, it is something
that always seems to be around when we think of food.
However, if you look
at it from an economic point of view, the fresh fish market is one of the
oldest perfect competitions in our country. It is not only a market, but also a
tradition and a lifestyle for many fishermen who have had the skills for
catching fish passed down for generations.
Being in a perfect
competition, there is a very large amount of fishmongers in Malaysia, and all
of them are selling the same thing, fish .
The fresh fish market
is a very open market, as long as you have fish to sell, you're set. All you
have to do is rent a stall at a local market and you can start your business.
However, pricing is important when you're selling fresh fish. However, sellers must
conform to the market price as they are price takers and have no market power, so if you overcharge
for your fish, you'll probably run out of business very soon.
The supply of fish is
not something you tend to worry about, after all, the sea is always there, so
there will always be fish, right? Well, when you really think about it, many
factors can affect the supply in the fresh fish market. For example, the
weather. During the heavy rain season in Malaysia, fish supply is heavily
reduced, as fishermen cannot go out to sea to catch the fish. At that point,
the demand would surpass the supply, and the price of fish would increase. This
will result in a shortage of fish in Malaysia.
Another example is Chinese New
Year. This year during the festivities, the supply of fresh fish
was drastically reduced at wet markets in the cities and as the majority of
Chinese wholesalers were on their Chinese New Year Holiday. Tenggiri fish were
being sold between RM26 and RM27 per kilogram , Sardines between RM5-RM9, Tuna
fish between RM6-RM7 and prawns between RM19-RM26 per kg depending on size.
These prices are RM1-RM1.50 above their market equilibrium prices, but people
still bought them.
The laws of demand
and supply dictates that when prices increase, demand will decrease. But in
this case, demand did not decrease. This is because, being a festive season,
this was a special case. During Chinese New Year, chinese families have family
dinners and banquets where fish is usually served, and during that time of
celebration, they omitted the increment in the prices for fish. This goes to
show that many factors are able to influence a perfect competition and we can't
just follow the generic rules of demand and supply when we analyze the
market.
Producers in the fresh fish market earn normal profit.
At this point, the fresh fish sellers are putting all their resources to the best
use, working at full efficiency. The overall goal of the fishmongers is
to maximize their economic profit while minimizing their costs.
Written by Cheryl Chai Hui Yih (0314945)
Wow! I love your blog, I think I can get a feel bout what is perfect competition now.
ReplyDeleteBut I do wonder, can you give me an example of where fish markets that actually have a perfect competition structure is?
Thank you so much for reading my post. Well, I do have one suitable answer. And that is the Billingsgate Fish Market in the United Kingdoms. This place is known for it's variety of fish and seafood. Because it is a fish market that sells similar fish in each stall, I think it is eligible as a Perfect Competition market structure based. Hope this is useful for you.
ReplyDeleteCan you give other examples of perfect competition in Malaysia. Thanks in advance. =)
ReplyDeletethank you for the information:))))
ReplyDeleteThis article gives the light in which we can observe the reality. This is very nice one and gives indepth information. Thanks for this nice article. Sea Water Fish
ReplyDelete