Basics of supply and demand

Lifestyle

August 24, 2023

Fish stalls at the Gadong Wet Market. PHOTO: HAJAH SOFIAH HAJI UMAR

For this week on Money Matters, we’ll be covering an aspect of economics known as supply and demand. Supply and demand represents one of the core principles in economics and is fundamental in the study of both macroeconomics and microeconomics. What is exactly is the concept behind supply and demand?

WHAT IS SUPPLY AND DEMAND?

On the surface, supply and demand is usually discussed as “the relationship between buyer and supplier”. It is usually used to determine the particular price of an item or a service; so, the higher the demand, the lower the supply therefore the higher the price. It’s pretty simple, right? To take a closer look at this fundamental concept, let’s break down each individual term first.

First, let’s take a look at demand. Demand refers to the quantity of a product or service desired by consumers or buyers.

When discussing demand, it’s good to remember that there is a specific threshold that consumers are willing to spend on a particular product. Would you pay BND1.50 for one packet of nasi katok? How about BND3 for the same nasi katok? This correlation between price and quantity is known as the demand relationship.

Next, let’s take a look at supply. Supply refers to the quantity of a product or service that the market, be it a company, a country or the whole world, is able to provide. Just like demand, the link between supply and the price threshold for consumers is known as the supply relationship.

Since each term is closely linked to the price, it is widely accepted that the price of a particular item or service, is simply a reflection between the supply and demand. In economic theory, this relationship is used to determine the most efficient way to allocate resources.

This is where the two laws, the law of demand and the law of supply, come into play.

THE LAW OF DEMAND

The universally accepted definition goes like this. The law of demand states that the higher the price of a good or service, the less demand will be for that particular good or service, provided that all other factors remain equal. To put it simply, the higher the price, the lower the quantity demanded.

What does the phrase “provided that all other factors remain equal” mean? It just means that price is the only factor that is in play.

Let’s take a look at an example. If you had a choice between two identical smart phones, you would naturally choose the one with the lower price, right?

Everything about the two phones are identical, so choosing the lower priced one would allow you to use the money that you saved to purchase something else, like a phone case.

So, the more money that buyers will have to fork out, the less likely they will want to forgo buying something else that they value more.

THE LAW OF SUPPLY

The law of supply is somewhat the opposite to the law of demand; the higher the price of a particular good or service, the higher the quantity of the good or service.

In terms of the supplier, selling more of a particular product or service at a higher price means more money. The difference is that in the law of supply, time is an important factor.

This is because suppliers need to make adjustments and react to the changes in demand.

To use an example, let’s say Mr X owns an indoor sports complex where people regularly rent to play futsal or basketball.

During the monsoon season, Mr X can expect more customers and addresses this need; he hires a few extra hands as temporary staff and prepares more drinks in the canteen.

Now, if there was a sudden drastic change in the climate and the monsoon season goes on for the whole year, Mr X would need to accommodate for this change, hiring permanent staff of the year and look to increasing space or managing the time slots more efficiently.

Now that we’ve covered the two laws, how does this affect prices?

Imagine that you own a brand new smart phone producing company. For the release of your flagship phone; let’s call it the Eco – the retail price you’ve set is BND500.

Since your company is brand new, you decide to produce 100 Ecos for the Brunei market to test the waters. Now, let’s look at two scenarios that will determine the price of your product.

If on the first week of launch, the Eco was demanded by 120 people, the price will increase because as you don’t have enough Ecos on hand, demand increases and so will the price.

Now you will have to produce another 20 Ecos, showing that the higher the price, the higher the quantity supplied.

In the second scenario, if 80 people demanded the Eco, the price will not increase because supply exceeds demand.

You may even consider lowering the price so that you can sell the remaining 20 Ecos.

So there you have it. There are several more ideals such as economic equilibrium that goes hand-in-hand with supply and demand. This is just the gist of one of the key principles in the wacky world of economics has to offer. Hopefully it will help in moving you in the right direction and pique your curiosity in finding out more.

This article is for general information purposes only and while the information in it is believed to be reliable, it has not been independently verified by us. You are advised to exercise your own independent judgement with the contents in this article. – Standard Chartered Bank

Saudi storm brings lightning, fierce winds to Makkah

World

August 24, 2023

Lightning strikes the Saudi city of Makkah as fierce storms lash the west part of the desert kingdom. PHOTO: AFP

RIYADH (AFP) – Fierce storms closed schools yesterday in Saudi Arabia’s Makkah region, home to Islam’s holiest site, the Grand Mosque, which was lashed by heavy rains and wind overnight, witnesses said.

As pilgrims tried to circumambulate the Kaabah, the giant black cube towards which all Muslims pray, a bolt of lightning struck the iconic Fairmont Makkah Clock Royal Tower hotel, illuminating the night sky late on Tuesday.

The storm brought gale force winds exceeding 80 kilometres per hour, spokesman for the National Centre for Meteorology Hussein al-Qahtani told AFP.

The conditions were similar to a 2015 storm that felled a crane at the Grand Mosque, killing more than 100 people and injuring hundreds more, Qahtani said.

No casualties were reported in Tuesday’s storm.

Makkah resident Abu Mayyada told AFP he was out buying cigarettes and petrol when “everything went black in front of me” as the worst of the storm hit.

“Suddenly I lost control over the vehicle. I couldn’t see anything so I started listening to Al-Quran on the radio. I didn’t understand what was happening,” he said.

The Makkah neighbourhood of Al-Kakkiyah recorded 45 millimetres of rain within 24 hours, the meteorology centre shared in a post on X, formerly known as Twitter.

Footage shared with AFP by Makkah residents showed pilgrims outside the Grand Mosque who were toppled over by the wind, which also sent crowd barriers sliding across the rain-slicked floor.

“The scene was very scary,” said Makkah resident Mohammed, who was grocery shopping at the height of the storm.

“Everything happened within a few minutes, when it started raining in a crazy way.”

Another resident, Yusuf, said August usually brought strong winds to Makkah but that Tuesday’s storm was “the worst” he could remember.

Flash flooding had mostly dissipated by yesterday morning, said the residents, who gave only their first names for fear of reprisals.

Nevertheless the Makkah regional government said on X that schools would be closed in parts of Makkah, with classes conducted on an e-learning platform, “in the interest of everyone’s safety”.

The meteorology centre warned of further storms bringing rain, wind and thunder to the Makkah region and elsewhere in western Saudi Arabia.

Thursday, August 24, 2023

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August 24, 2023

BMI revises Malaysia GDP forecast down to 4pc this year

Business

August 23, 2023

BERNAMA – BMI, a Fitch Solutions company, has revised downward its forecast for Malaysia’s real gross domestic product (GDP) growth to 4.0 per cent in 2023, from 4.2 per cent previously.

BMI said the weaker-than-expected reading for the second quarter 2023 (2Q 2023) leaves its previous 2023 growth forecast of 4.2 per cent looking too upbeat, as it suggests that the local economy must grow by an average of 4.1 per cent year-on-year (y-o-y) in the second half of this year (2H 2023).

“However, this will be challenging to attain given the backdrop of weakening global demand and tight monetary conditions,” BMI said in a statement.

It said further analysis of the latest GDP figures showed an uptick in investment’s contribution to real GDP growth from 0.9 percentage points (pp) in Q1 2023 to 1.1 pp in the second quarter.

However, BMI expects this momentum to be short-lived as high borrowing costs will weigh on domestic and foreign businesses’ appetite to borrow and invest.

To illustrate the changes that remain for businesses, Malaysia’s manufacturing purchasing managers’ index came in at 47.8 in July 2023 – the 11th consecutive month it has been below the 50.0 level, implying contraction.

“Beyond domestic challenges, we maintain the view that weakness in global demand will keep a lid on Malaysia’s export performance this year.

“Indeed, net exports already removed 0.7 pp off GDP growth in 2Q, extending the -2.3 pp in Q1. Year-to-date nominal figures further showed exports contracting by an average of 5.0 per cent y-o-y in the first seven months of the year, with a sharp contraction of 14.0 per cent y-o-y in June, although this eased to -13.0 per cent y-o-y in July.

“However, most of the weakness could now be behind us,” it said.

Malaysia’s economic resilience was mainly driven by consumption, but BMI expects this strength to falter as the impact of tight monetary conditions feeds through the economy.

BMI believes that Bank Negara Malaysia (BNM) has completed its hiking cycle at 3.00 per cent, with the overnight policy rate raised by a cumulative 125 basis points (bps) since May 2022 – the steepest since records began. It expects this will weigh on interest rate-sensitive sectors of the economy, including consumption and investment.

“In particular, we highlight that the initial pent-up demand following the removal of Covid-19 restrictions has eased, with households drawing down on savings since April 2022,” BMI said.

“That said, we are not expecting any rate cuts to materialise before the first half of next year, suggesting that monetary settings will remain tight over the coming months,” it added.

China’s AI investment projected to reach over USD38 billion in 2027

August 23, 2023

artificial intelligence (ai) and machine learning (ml) — PHOTO: ENVATO

ANN/CHINA DAILY – According to a recent report from market consultancy IDC, China’s commitment to artificial intelligence (AI) is projected to surge to USD38.1 billion (CNY273.9 billion) by 2027. This substantial investment is anticipated to constitute approximately nine per cent of the global aggregate, signifying China’s significant role in shaping the AI landscape.

In recent years, the report said, China has continued to lift its capability in artificial industries. In the short term, there is still room for growth for the development of the domestic artificial intelligence market in terms of integrating with different needs of various industries.

In the future, under government support and accelerated industrial upgrade, AI technology will certainly integrate with demands from various industries, and be part of products, services and business modes.

AI hardware will remain the most important destination for market investment over the five-year forecast period, accounting for over 60 per cent of investments in the country’s AI market. But the investment proportion will shrink regularly and the annual investment growth will slow down over the five-year forecast period.

The AI software market is deemed to have greater potential. Investment growth will be number one among the AI technological markets. The investment in AI software is expected to reach nearly USD10 billion, accounting for about 25 per cent of China’s total AI market investment, up nearly six percentage points of that in 2022.

Singapore police receives bomb threat reports at 18 locations; no danger found

Southeast Asia

August 23, 2023

SINGAPORE (CNA) – Reports were made to the police regarding suspected bomb threats targeting 18 different locations across Singapore, including government structures, embassies, and various sites of significance.

Security checks were conducted and no items of security concern were found, said the Singapore Police Force (SPF), adding that it was alerted to the case at about 9.10am.

SPF did not provide further details of the threats or where the 18 locations are, but the Ministry of Sustainability and the Environment (MSE) separately confirmed that there was a bomb threat related to the Environment Building.

Singapore’s Environment Building pictured after an ’emergency situation’ that led to a lockdown. PHOTO: CNA

The police also said they are aware of similar reports of email bomb threats in South Korea recently – seemingly sent by the same person – which turned out to be a hoax.

“The police are investigating this case of communicating false information of a harmful thing under Section 268A of the Penal Code 1871,” SPF added. The offence carries a jail term of up to seven years, a maximum fine of SGD50,000 (USD36,800), or both.

“The police take all security threats seriously and will not hesitate to take action against those who intentionally communicate false information on bomb threats.”

The police were responding to CNA’s queries after the Environment Building, which houses MSE and its statutory boards the National Environment Agency (NEA) and water agency PUB, was placed on lockdown due to a “security situation”.

News of a potential situation at the building at 40 Scotts Road emerged at around 9am when multiple sources told CNA that people were allowed to leave but not enter.

Minister for Sustainability and the Environment Grace Fu later wrote on Facebook that no threat items were found following preliminary checks by the police and security officers.

The ministry said on Wednesday night, in response to CNA’s queries, that it has stepped up security and restricted access to the Environment Building.

“The safety of all staff and stakeholders of the Environment Building is our priority,” it added. “MSE will cooperate fully with the Singapore Police Force in police investigations.”

Employees at the Environment Building were informed in an email at about 12.10pm that the building would be closed for the rest of the week.

In the event that similar threats are received at building premises, the police said security officers or auxiliary police officers should conduct a search for suspicious items.

“Some tell-tale indicators include items atypical of the environment, or with overt characteristics such as wires. Security officers and APOs have received training on how to assess whether suspicious items are of concern and how to handle such situations appropriately,” the police added.

Members of the public are also advised to stay vigilant and report suspicious individuals or items. This includes people in unusual attire and acting suspiciously, or parcels with stains, wires or emitting a strange smell.

India lands spacecraft near moon’s south pole

World

August 23, 2023

India Lunar Mission — Journalists film the live telecast of spacecraft Chandrayaan-3 landing on the moon at ISRO's Telemetry, Tracking and Command Network facility in Bengaluru, India. PHOTO: AP

Journalists film the live telecast of spacecraft Chandrayaan-3 landing on the moon at ISRO’s Telemetry, Tracking and Command Network facility in Bengaluru, India. PHOTO: AP

NEW DELHI (AP) – India on Wednesday made history as it became the first country in the world to land its spacecraft near the moon’s south pole, an uncharted territory that scientists believe could hold vital reserves of frozen water, and the fourth country to achieve a moon landing.

A lander with a rover inside touched down on the lunar surface at 6.04 local time, sparking cheers and applause among the space scientists watching in the southern Indian city of Bengaluru. After a failed attempt in 2019, India now joins the United States (US), the Soviet Union and China in reaching this milestone.

Indian Prime Minister Narendra Modi watched the historic landing from South Africa, where he is participating in the BRICS nations summit. “India is now on the moon. India has reached the south pole of the moon – no other country has achieved that. We are witnessing history,” Modi said as he waved the Indian tri-coloured flag.

India’s successful landing comes just days after Russia’s Luna-25, which was aiming for the same lunar region, spun into an uncontrolled orbit and crashed. It would have been the first successful Russian lunar landing after a gap of 47 years.

Russia’s head of the state-controlled space corporation Roscosmos attributed the failure to the lack of expertise due to the long break in lunar research that followed the last Soviet mission to the moon in 1976.

Excited and anxious, people across India, home to the world’s largest population, crowded around televisions in offices, shops, restaurants and homes. Thousands prayed on Tuesday for the success of the mission with oil lamps on the river banks, temples and religious places, including the holy city of Varanasi in northern India.

India’s Chandrayaan-3 – “moon craft” in Sanskrit – took off from a launchpad in Sriharikota in southern India on July 14.

“India’s pursuit of space exploration reaches a remarkable milestone with the impending Chandrayaan-3 Mission, poised to achieve a soft landing on the lunar surface. This achievement marks a significant step forward for Indian Science, Engineering, Technology, and Industry, symbolising our nation’s progress in space exploration,” the Indian Space Research Organization said in a statement earlier yesterday.

It said that a successful Chandrayaan-3 landing would be monumental in fueling curiosity and sparking a passion for exploration among youth.

“It generates a profound sense of pride and unity as we collectively celebrate the prowess of Indian science and technology. It will contribute to fostering an environment of scientific inquiry and innovation,” the organisation said.

Many countries and private companies are interested in the south pole region because permanently shadowed craters may hold frozen water that could help future astronaut missions.

The six-wheeled lander and rover module of Chandrayaan-3 is configured with payloads that would provide data to the scientific community on the properties of lunar soil and rocks, including chemical and elemental compositions.

A hidden musical gem

Lifestyle

August 23, 2023

page 13 c_24082023 — the band Apple Rock Times, known as ART. PHOTO: APPLE ROCK TIMES

A decade of musical innovation and cultural commentary.

In the dynamic and ever-evolving landscape of the music industry, some bands emerge as hidden gems, creating a unique sound that resonates with their fans on a personal level.

One such group is the indie pop rock band, Apple Rock Times, a five-member ensemble making waves since its inception in the late 2006.

Known colloquially as ‘ART’ within local circles, Apple Rock Times released a series of albums as part of their musical evolution.

Their discography reads like a journey through time and experience, from the EP spanning 2007 to 2009, to the releases that followed, including Roket in 2012, Dominasi Sfera in 2014, and their latest offering Otopsi Huru Hara, in 2023.

The band Apple Rock Times, known as ART. PHOTO: APPLE ROCK TIMES

Comprising Adam/Duke on bass, Fadil on drums, Joj as the vocalist, Khaliq on lead guitar and Afwan on lead guitar, the band’s journey has been marked by a commitment to their craft and a desire to share their distinct message.

“Apple Rock Times embarked on a musical adventure right after completing our O levels,” said vocalist Joj.

“Our initial intent was simple – to stay connected and bond over a shared passion for music.” Little did they know that this shared affinity would blossom into a formidable creative partnership that would carry that bond through
the years.

Their early influences, rooted in the indie band scene, shaped the foundation of their genre, which they proudly call “indie pop rock”, and their musical catalogue has surely shown their ability to adapt, refine, and elevate their craft with each release.

“It’s not just about churning out albums for the band though, our focus is on creating music that resonates with our own experiences and those of our listeners,” added Joj.

He shared that he and Adam, as the band’s principal songwriters, would pour their emotions, reflections, and insights into their music, resulting in a collection of songs that delve into themes of friendship, the dynamics of the working environment, and societal commentary, all cleverly wrapped in Malay with a creative twist.

Their latest album Otopsi Huru Hara is a reflection of their artistic maturity.

Released this year, the album is a deep dive into the chaos of life, exploring themes of friendship, workplace politics, and the complexities of relationships.

The six tracks that constitute the album – Rona Neon Pasifik, Sangsi Hal Balkoni, Sfera Hati, Refleksi Api, K E L A S I and Air dan Bunga – encapsulate the band’s commitment to translating real experiences into relatable melodies.

ART during a performance. PHOTO: APPLE ROCK TIMES

Despite their musical prowess, Apple Rock Times has chosen a path less trodden, shying away from grand press conferences and elaborate album release events, preferring to let their music speak for itself.

In a world where visibility often defines success, their approach is grounded in a deep-rooted connection with their music and a genuine desire to create something enduring, a legacy they can be proud of – an approach that resonates with fans and admirers who appreciate their dedication to their craft.

Moreover, Apple Rock Times has maintained a low profile when it comes to live performances.

Their stage presence is reserved for intimate settings, private events, and the occasional gig such as the Pelangi Awards in 2017. “This measured approach to live shows aligns with the band’s vision – we prioritise authenticity and connection over widespread fame,” said Joj.

With every note they strum and every lyric they sing, Apple Rock Times weaves a narrative capturing the essence of the human experience, reminding us that music, in its purest form, is a medium for shared emotions and stories.

Top graduates receive University Medal and Book Prize Awards

National

August 23, 2023

Minister of Education Datin Seri Setia Dr Hajah Romaizah binti Haji Mohd Salleh presents an award to a recipient. PHOTO: JAMES KON

Universiti Brunei Darussalam (UBD) students received recognition for their hard work and dedication in their achievement of excellence at the University Medal and Book Prize Awards Ceremony on Wednesday in conjunction with the recent 35^th UBD convocation ceremony.

UBD Vice Chancellor Dr Hazri bin Haji Kifle said, “The medal and book prize presentation ceremony is an annual event related to the UBD convocation and regarded as the official recognition of achievements and academic excellence for graduates and students.”

Minister of Education Datin Seri Setia Dr Hajah Romaizah binti Haji Mohd Salleh, who is also the chairperson of the UBD Council was the guest of honour for the ceremony at the university’s Chancellor Hall.

More details on Thursday’s Borneo Bulletin

Can audiobooks influence our dreams?

Lifestyle

August 23, 2023

Young woman listening to music while sleeping on bed at home — PHOTO: ENVATO

AFP – Dreaming is a form of brain activity that’s as fascinating as it is mysterious to the scientific community. So much so that researchers are still unable to understand with any certainty what inspires our dreams. However, a new study suggests that audiobooks could have an effect on shaping what we dream about.

Researchers at the German Universities of Freiburg and Tübingen have discovered that listening to an audiobook at bedtime can affect the listener’s brain activity, and even the content of their dreams. They reached this conclusion after conducting an experiment with 20 participants, aged between 20 and 30. They were asked to listen to various audiobooks before going to bed, including adaptations of Agatha Christie’s thriller The Mystery of the Blue Train and Cornelia Funke’s young adult fantasy novel, Inkheart.

The scientists equipped volunteers taking part in the study with electroencephalography (EEG) caps to measure electrical activity in the brain during sleep. They also woke them up several times during the night to ask them questions about their dreams and the content of the audiobook passage they had been listening to.

This enabled the research team to discover that participants who had listened to the same audiobooks had similar brain activity during REM sleep, that is the dream phase.

The researchers then analysed the brain signals of their study subjects to confirm this finding. They found that high-frequency brain activity (18-30Hz) correlated with the study participants recalling content relating to the audiobooks they had listened to before falling asleep.

In other words, experiences in our daily lives can shape the content of our dreams through memory reactivation during sleep.

“Our findings demonstrate that daytime events concurrently influence our brain activity during sleep and the content of our dreams. Learning material that was reinstated in REM sleep brain activity was also integrated into the narratives of dreams. We thus provide evidence that memory processing during sleep shapes the content of our dreams,” wrote the researchers in their paper, recently published on Biorxiv.org.

This increased understanding of dreams holds great promise for neuroscience.

“Individuals with certain psychological or psychiatric conditions might benefit from tailored strategies that enhance memory processing or treat disorders of dreaming during sleep, potentially contributing to improved cognitive and emotional well-being,” study lead author, Deniz Kumral, a researcher at the University of Freiburg told New Scientist. However, given the small size of its sample of participants, this approach needs to be backed up by more in-depth research in the future.

Borneo Bulletin OnlineThe Independent Newspaper in Brunei Darussalam, Sabah and Sarawak

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