CASE STUDY : GOVERNMENT TO DECIDE ON WHETHER TO MAINTAIN CEILING PRICE OF CHICKEN

The decision on whether to maintain price control will be made after proper deliberation, says Domestic Trade and Consumer Affairs Minister Datuk Seri Alexander Nanta Linggi.The government imposed a ceiling price of RM8.90 per kg of chicken, under the price control scheme which was enforced from Feb 5 to June 5. "We are now in the process of making observations and studying (the situation and deciding) if we will go on with the RM8.90 ceiling price or not," he told reporters at the ministry's open house on Tuesday (May 2023).

He said the government was also investigating claims on the existence of chicken cartels.Nanta Linggi added that the reaction to the abolishment of Approved Permits has been fairly positive, although there are importers who were disappointed. He said the priority now was to meet domestic demand. "This is not permanent. Once supply is enough we can let them export again," he said.The National Action Council on Cost of Living special meeting on the food production industry had, on Jan 31, decided to reduce the maximum retail price for standard chicken by 20 sen to RM8.90 from the RM9.10 ceiling price.

https://www.thestar.com.my/news/nation/2023/05/24/govt-to-decide-on-whether-to-maintain-ceiling-price-of-chicken accessed 24 May 2023

Answer the following questions based on case study entitled "Government to decide on whether to maintain ceiling price of chicken" above:

1. Contrast between the concept of change in quantity demanded and change in demand for chicken. (10 marks)
2. With an appropriate diagram, explain the government of price control mechanism for chicken in Malaysia. (15 marks)