Online Shopping Lifts Aramex Profits by 4% and Rent Cap Removal Hits Abu Dhabi

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Article 1 The article chosen is ‘Online shopping lifts Aramex Profits by 4%’ extracted from The National (Barnard, 2014). Three major microeconomic concepts would be used to analyze the article, which are demand, the law of demand for complements and elasticity’s. The article talks about the rise in the profit of Aramex due to increase in online shopping. This article is a clear example of demand of complementary goods. The law of demand for complementary goods states that if the demand for one complement increases it leads to an increase in the demand of the other. Online retailing is a new introduction in the world of shopping. It has been well received all over the world, but in Middle East the reception has been quite slow in the start. With the spread of awareness through various methods of advertising the consumers have now become more aware about the advantages of online retailing, the growth of acceptance of credit cards and the increased security which is involved in the online transactions has led to an increasing the demand for online retailing. The Middle East online market is expected to grow US$9 billion in 2012 to US$15 billion in 2015 according to PayPal Mena. In the graph D1 is the original demand curve for online retailing. With the growth of awareness amongst the consumers there has been a rightward shift to D2 showing an increase in demand for online retailing. Aramex is one of the major logistics and global transportation firm. The profits of the company has been increased by 14 percent. First quarter net income surged to Dh78.8 million, up from Dh69.3m during the first three months of 2013, Revenues rose 6 per cent compared with a year earlier, rising to Dh852m between January and March 2014 from Dh803m... ... middle of paper ... ...d an instant increase in the rents of the residential units, making the tenants move from prime to off prime locations, this move eventually led to a drastic increase in the rents of the residential units in the off prime areas. However in the long run it is expected that the rents would come to control eventually because it is obvious for the landlords that without rent control it would be impossible for them to make any profits. References Nair,Manoj,2014,’Rent cap removal hits Abu Dhabi’,Gulfnews,Accessed on 25th April, http://gulfnews.com/business/property/uae/rent-cap-removal-hits-abu-dhabi-residents-1.1316937 Price ceilings, product quality and consumer welfare - Springer. 2014. Price ceilings, product quality and consumer welfare - Springer. [ONLINE] Available at: http://link.springer.com/article/10.1007%2FBF01229240#page-1. [Accessed May 4, 2014].

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