Module Name

[ Economics ]

Submitted To:

[ U Mg Mg Kyaw ]

Submitted By:

[ ShweYiTunSanAung ]

[ Student ID – 2022B2746 ]
Table of Contents
Introduction............................................................................................................................3
Acknowledgement..................................................................................................................4
Task 1....................................................................................................................................5
Law of demand....................................................................................................................5
Figure 1.................................................................................................................................5
Task 2....................................................................................................................................6
Law of supply......................................................................................................................6
Figure 2...................................................................................................................................6
Task 3....................................................................................................................................7
Influences on demand (non-price factors).....................................................................7
Figure 3...................................................................................................................................8
Task4.....................................................................................................................................9
Influences on supply (non-price factors)........................................................................9
Figure 4.................................................................................................................................9
Task 5..................................................................................................................................10
Influences on supply (non-price factors)......................................................................10
Input prices........................................................................................................................10
Government regulation....................................................................................................10
Equilibrium.........................................................................................................................10
Surplus...............................................................................................................................10
Shortage.............................................................................................................................10
.............................................................................................................................................11
Figure 5...............................................................................................................................11
Task 6..................................................................................................................................12
Government Price Control...............................................................................................12
Price Ceilings.....................................................................................................................12
Price floor...........................................................................................................................12
Conclusion.........................................................................................................................13
Introduction
About cosmetics
Cosmetics are very important in human society . Ancient Egyptians and Sumerians
have been used the cosmetics since the middle ages . Cosmetic market is composed of
several categories: skincare, hair care, make-up, perfumes, toiletries and deodorants,
and oral cosmetics.
Acknowledgement
My name is Shwe Yi Tun San Aung.I’m studying at the Strategy First University HND
Foundation Class. In this course, we have to learn 8 units at the economic subjects. I
would like to express my special thanks of gratitude to my teacher, U Mg Mg Kyaw, who
explained to me to do this wonderful assignment.
Task 1

Law of demand

“The law of demand says that at higher prices, buyers will demand less of an economic
good”. For example, the price of the lipstick value is P3. In that price, the quantity of
demanded is about Q3. If the prices rise from P3 to P1, the quantity of demanded drop
from Q3 to Q1.
Demand Curve

P1

price

P2

P3 Demand Curve

Q1 Q2 Q3

Quantity demanded

Figure 1
Task 2

Law of supply
“The law of supply says that at higher prices, sellers will supply more of an economic
good”. For example, the price of the lipstick supplied is P3, the quantity of supplied is
Q3. Because, if the price is low, suppliers don’t want to sell. If the price rises from P3
to P1, the quantity of supplied will be Q1.

Supply curve

Figure 2
Task 3

Influences on demand (non-price factors)

The price of related goods
In the cosmetics market, if the price of Loreal cosmetics brand goes up too much , the
demand for Loreal will subsequently drop. Because we can use other substitute
cosmetics brands like Maybeline, MAC, NYX, Colorbar, Bobbi Brown, Wet N Wild, L.A
Girl etc.
Consumer tastes or preferences
Cosmetics companies have to follow with popular trends and try to produce more
innovative cosmetics brands that people will like. The company which is failed is
Revlon. Women were now looking for more natural looking make-ups. But, Revlon did
not innovate according to changing needs.
Income of consumers
In the figure, the curve has shifted to right, the quantity demanded increasing at all
prices, cause it depends on people ‘s income level. In the figure, the lipstick quantity
demanded Q can buy at price P. When the income level drops, only the quantity
demanded Q1 can buy at price P1.
A shift in the demand curve

Figure 3
Task4

Influences on supply (non-price factors)

Technology
Beauty companies were started to put technology at their cosmetics industry. L’Oreal’s
Make-up Genius and Klara aim to offer professional skin care analysis in the comfort of
cosmetics consumer’s homes and it was incorporated by YSL. It also show how its
make-up artists use its products. In figure, when suppliers discover a new technology
that allows it to produce at a lower cost, the supply curve will shift to the right. A
cosmetics technology that reduces costs of production will shift supply to the right, so
that a greater quantity will be produced at any given price.

A shift in the supply curve

Figure 4
Task 5

Influences on supply (non-price factors)

Input prices
A cosmetics technology that reduces costs of production will shift supply to the right, so
that a greater quantity will be produced at any given price , when labours from the
cosmetics industry increased, cosmetics production was increased. input prices are also
rising because worker’s salaries are being paid more than before.

Government regulation
There are over half a million animals in the world who suffer and die every year due to
cosmetic testing . That’s why in more than 40 countries around the world , the
government charges more tax on beauty brands that test on animals.

Equilibrium
The equilibrium is the price where the quantity demanded is equal to quantity supplied.
The equilibrium price is the demand curve (D) and the supply curve (S) intersect at the
equilibrium point E with a price of 40000 Ks and a quantity of 40.

Surplus
At the price of 50000 ks, the quantity of cosmetics supplied rises from the 40 to
50.When quantity demanded has fallen to 20, quantity supplied has risen to 50 . So,the
quantity supplied exceeds the quantity demanded.This is called an excess supply or
surplus.

Shortage
“A shortage occurs whenever quantity demanded is greater than quantity supplied at
the market price.” When the market place is not allowed to rise to the equilibrium level ,
quantity demanded exceeds quantity supplied , and thus a shortage occurs. In this
situation, cosmetics consumers will no longer be able to buy as much as they want.
 Equilibrium

80000

Excess supply or surplus

70000

60000

50000
Price( Ks per product)

40000

30000

20000

Excess demand or shortage

10000

0
10 20 30 40 50 60 70

Quantity of cosmestics(millions of products)

Supply Demand

Figure 5
Task 6
Government Price Control

Price Ceilings
“A price ceiling keeps a price from rising the ceiling. For example, Dior is a famous
makeup brand that every girl likes. Not every girl can buy it because it’s expensive. So,
those girl use low price and poor quality makeups and they cause allergies, acne and
damage their faces so bad. Then, government had to reduce and control the
unnecessarily high prices. This is called price ceilings.

Price floor
A price floor is the lowest legal price that can be paid in markets for goods and services,
labour, or financial capital. For example, the cosmetics employee’s minimum wage at
the end of 2014 was $7.25 per hour. With such a low salary, his living conditions cannot
be comfortable. So, the government had to control such low currencies, is called price
ceiling.
Conclusion
To thrive in today highly competitive cosmetics market, business require innovation and
long term competencies. Cosmetics may be simply to apply and it’s increase a girl’s
confidence by using various cosmetics products. Focusing on how to build a successful
marketing team plan, marketers must understand the market growth which can be the
ride of demand for personal grooming products from the youth population and demand
for innovation.
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