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  DD202A Tutor Marked Assignment (2015-2016, First semester) Cut-off Date: 15 December, 2015 [100 marks] This TMA expects you to produce an essay based on what you have learned in your DD202A course, chapters four and five, “Economics and Economic Ch

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مُساهمةموضوع: DD202A Tutor Marked Assignment (2015-2016, First semester) Cut-off Date: 15 December, 2015 [100 marks] This TMA expects you to produce an essay based on what you have learned in your DD202A course, chapters four and five, “Economics and Economic Ch   الثلاثاء نوفمبر 03, 2015 6:44 pm




DD202A
Tutor Marked Assignment (2015-2016, First semester)
Cut-off Date: 15 December, 2015

[100 marks]
This TMA expects you to produce an essay based on what you have learned in your DD202A course, chapters four and five, “Economics and Economic Change”. It is marked out of 100 and is worth 20% of the overall continuous assessment. This TMA requires you to apply the course concepts to your own experience and to discuss the economic change of such an application.
The TMA is intended to:
• Develop your evaluative skills in explaining why a monopolistically competitive firm has downward sloping demand and marginal revenue curves.
• Identify the key factors that determine a firm’s success.
• Analyse the situation of a monopolistically competitive firm in the long run.

The TMA:
Please read the following article and answer the question listed below:

Coffee Culture Thrives in the Middle East
A Euromonitor International survey has suggested that the regional coffee industry continues to thrive despite the recent economic downturn, which saw most consumers cutting back costs on non-basic commodities.
Michael Schaefer, consumer food service analyst at Euromonitor, says the Middle East coffee sector, including that of the North African region, is now a multi-million dollar industry that has not shown any let-up in its annual growth performance.…Schaefer added that since 2004, overall coffee consumption in the region has posted steady increase with UAE growing by a massive 85 percent, Morocco and Saudi Arabia by over 30 percent, and Egypt by a healthy 20 percent. The figures, he said, indicate a “strong demand for both at-home and on-the-go coffee drinking opportunities.”
The Euromonitor analyst added that while coffee consumption and the presence of coffee shops are not new to the region, it has evolved into a more socially oriented business that attracts people of various age, gender, and cultural background.









Question:



“There is no question that the modern coffee-shop sector represents something new, providing a social outlet for women, students, and other young people in stark contrast to the male-dominated traditional café sector.
The Euromonitor study focused on the region’s surging young demographics—in the GCC, for instance, where the median age is 26—as one of the factors driving the coffee industry to post significant revenues. “One of the key drivers behind [the coffee industry’s] expansion is a soaring youth population—students and young people are a key demographic for coffee chains the world over, and many of the Middle East’s most important markets boast very young populations indeed,” says Schaefer.
Saudi Arabia, one of the largest markets in the Gulf region, enjoys a population of 15 million consumers under the age of 30, while Egypt is home to over 45 million consumers under the age of 30 years old, according to Euromonitor statistics. These brand-savvy young consumers, the report noted, have been key to transforming coffee shops into a place to socialize. Consequently, coffee shops have also transformed their recipes to cater to their “hip” clientele in the region by offering a wide array of hot and cold concoctions. Starbucks, for instance, sells over 30 blends of coffee, espresso, blended drinks, teas, and the Frappuccino range. According to the chain’s spokesperson, they currently offer a whopping list of 87,000 beverage combinations, which include low-fat/skimmed milk and decaf, and different types of milk, syrups, and sugar.
With its huge client base, the Middle East has become a favorite destination for globally recognized coffee brands such as U.S. giant Starbucks, UK’s Costa Coffee, and Canada’s Second Cup, to name a few. In an earlier interview with Arroya.com, a Starbucks spokesperson for the Middle East region, said the coffee chain has been operating 300 stores in Kuwait, Saudi Arabia, UAE, Egypt, Lebanon, Jordan, Qatar, Oman, and Bahrain. About 90 of these stores are located in the UAE—60 of which are based in Dubai.…“We are comfortable with our performance and growth plans in the region. Last year we opened over 26 stores across the Middle East region, with 17 stores in UAE alone, and we believe there is plenty of potential for more new stores. We see a significant growth opportunity in the UAE, and cross the region, and we continue to invest in the market,” the Starbucks spokesperson said.
In addition to these international brands, Schaefer said local operators have contributed to the vibrancy of the coffee business in the region. “Multiple local chains continue to hold their own—Egypt’s Cilantro [which caters to the high-end market], for instance, now operates 56 branches there, more than Starbucks and Costa combined, while in Saudi Arabia a number of local [stores] enjoy a brisk business,” he said. Fierce competition, Schaefer mentioned, has “helped fuel an accelerating process of segmentation, as chains look to differentiate their offerings.”
Source: Criselda E. Diala, “Coffee Culture Thrives in Middle East,” Arroya.com, June 29, 2010.
==============================================================



The Questions:
Discuss and analyse the most important key points in the above article in the light of factors that affect the demand for coffee.

Guidance notes for TMA
For this TMA you are required to write a structured essay of no more than 1000 words. This means that your TMA should be in the three parts indicated in the above question.
Part a)
In this part you need to discuss the important key points in the above article. Discuss what you learned from the above article; What are the most important factors affecting the demand for coffee in the middle east? This part of the TMA should not exceed 400 words. (40 points)
Part (b)
In this part of the TMA you are required to select course concepts from chapters 4 or 5, Economics and Economic Changes textbook, and use these concepts to analyse the situation described in the above article. Suppose that the government restricts the total number of new branches that can be opened by all chains. How would this affect the equilibrium price and chains profits of coffee market? Again this part should not exceed 300 words. (30 points)
Part (c)
Use demand and marginal revenue and cost curve graphs to show how can Costa ensure maintaining a profit margin over its competitors for a longer period of time before economic profits becomes zero? Explain your graphs in details showing which point, at equilibrium, all firms in the market will earn zero profits. You should spend no more than 300 words on this part of the TMA. (20 points for graphs and 10 points for discussion).
Your essay should be within the specified range of words. You are expected to present a well structured and organized piece of work that is of your own. Plagiarism will be strictly penalized. The assessment of the quality of your essay will be based on how you impress the reader (grader) about your knowledge and understanding of the topic. Attempt to use your own words and avoid using copy-paste. Your TMA should be attached with the following PT3form.

Good luck..

_________________
الإجــابة النمــوذجية
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DD202A Tutor Marked Assignment (2015-2016, First semester) Cut-off Date: 15 December, 2015 [100 marks] This TMA expects you to produce an essay based on what you have learned in your DD202A course, chapters four and five, “Economics and Economic Ch
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