Table of Content | Content | Page | | Table of Content | | 1.0 | Introduction……………………………………………………............................. | 1 | 2.0 | Price Elasticity of Demand for Sugar2.1 Availability of Close Substitutes……………………………………………….2.2 Length of Time Involved…...…………………………………………….........2.3 Necessities versus luxuries……………………………………………………..2.4 Definition of market……………………………………………………….......2.5 Share of sugar in the consumers’ budget…………………………………....... | 2 – 345 – 67 – 89 – 10 | 3.0 | Conclusion……………………………………………………………………….... | 11 | 4.0 | Bibliography……………………………………………………………………..... | 12 | | Appendix…………………………………………………………………............... | 13 |

Table of Figures Figure | Page | Figure 1: Availability of close substitutes for sugar…………………………………. | 3 | Figure 2: Differences of long run and short run for price hike in sugar…………….. | 4 | Figure 3: Differences between necessity goods (sugar) and luxury goods (honey)…. | 6 | Figure 4: Differences between narrow market and broad market……………………. | 8 | Figure 5: Differences between middle-income and low-income consumers with high-income consumers……………………………………………………………… | 10 |

1.0 Introduction

According to the article that was chosen, the Price Elasticity of Demand for Sugar in Malaysia is focused. The group members interpreted and analysed the article based on the core microeconomic concept of Elasticity. The analysed article is attached in the Appendix.
The article is mainly regarding the issue of decreasing the subsidy for sugar and also the implementation of goods and services tax (GST). However, the group members will only focused on the issue of reducing subsidy for sugar. Along with the decreased subsidising of sugar, the price of drinks will be increased at least by 10 cents per glass. The revenue will then be allocated to improve the public transportation system. Based on