Increased Income

Economics tuition is very popular in Singapore as the students need the tuition to gain knowledge and excel their A-level Economics Examination. Therefore, it is a huge market and it’s affected by many external factors. What are these factors? They are overall increased incomes and wages in Singapore. In this article, we will discuss the effects of increased wages and income in Singpore on Economics tuition. Moreover, we will also talk about some other factors that may contribute. The Rising Income First of all, let us talk about the rise in income. The relationship between income and economics tuition is complicated, but essential to understand. When there is a rise in income, the demand for economics tuition will gradually increase. When this happens, the quantity demanded of economics tuition increases but with the same price. Whereas the quantity supply will remain the same, hence result in shortage. Due to such a situation the economics tuition centres will increase the price, but they will not lose students. As the raise in price will increase the profitable amount so that they can increase the quantity supply. Now, we have learned that due to rise in income, the demand will increase, and so will the quantity and price. The Rising Wages When the wage of the economics tutor rises, the production cost of economic tuition will also increase. In such a case, the supply will decrease and so will the quantity, and as a result, the price will increase. So, if the supply of economics tuition decreases, the gradual increase in the price will be greater than the proportionate decrease in the amount. The Combined Factors The increase in price is due to the fact that the demand of economic tuition increased and there was a decrease in the supply. This has happened because there was a decrease in the supply and increase in the demand. First of all, these factors depend on the relative elasticies of demand and supply. Due to the demand and supply elasticity, the price might be relatively low. As wages in Singapore don’t usually rise, the decrease in supply will most probably not heppen, and if it does, it won’t be large enough. Therefore, the quantity will not be affected that much.

Increased Income & Its Impact on Economics Tuition