ECO 365 Week 2 Individual Assignment: Supply & Demand Simulation

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Summarize the Supply and Demand Simulation make sure to address the following:
a). What causes the changes in supply and demand in the simulation?
b). How do shifts in supply and demand affect your decision making?
c). List four key points from the reading assignments that were emphasized in the simulation
d). How can you apply what you learned about the concepts of supply and demand from the simulation to your workplace?
e). Determine how price elasticity of demand affects the decision making of the consumer and of the organization
f). Summarize our results of the assessment.
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ECO 365 Entire Course All DQs, Individual & Team Assignments

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WEEK 1
ECO 365 Week 1 Discussion Questions 1, 2 and 3
ECO 365 Week 1 Individual Assignment: Article Analysis Paper
Using the resource Electronic Reserve Readings (ERR) for ECO365, the Course Web Links, University Library, Internet, and/or other sources of literature, locate an article concerning trends in consumption patterns.
Prepare a 1,050-1,400-word paper in which you:
  • Define Economics
  • Define Microeconomics
  • Define Law of Supply
  • Define Law of Demand
  • Identify the factors that lead to a change in supply and a change in demand
  • Analyze the basis for the trends in consumption patterns as discussed in the article. In your analysis, consider the utility derived from the products mentioned in the article, describe what has occurred to change the demand for, or the supply of, the good or service, and market prices of those products or services.  Or to say it differently, make sure to utilize the terms you just defined as tools by which you analyze the article.
WEEK 2
ECO 365 Week 2 Discussion Questions1, 2 and 3
ECO 365 Week 2 Individual Assignment: Supply & Demand Simulation
Summarize the Supply and Demand Simulation make sure to address the following:
a). What causes the changes in supply and demand in the simulation?
b). How do shifts in supply and demand affect your decision making?
c). List four key points from the reading assignments that were emphasized in the simulation
d). How can you apply what you learned about the concepts of supply and demand from the simulation to your workplace?
e). Determine how price elasticity of demand affects the decision making of the consumer and of the organization
f). Summarize our results of the assessment.
ECO 365 Week 2 Learning Team Assignment: Organization Industry Overview
Prepare a 1400 – 1750 word paper analyzing the current market conditions of the organization/industry you selected during Week One.  Address the following topics in your analysis:
Market Structure
Impact of new companies entering the market
Prices
Productivity (consider law of diminishing marginal utility)
Cost structure
Wages & Benefits
Fixed and Variable Costs
Price elasticity of demand
Competitors
Supply and demand analysis
Impact of government regulations
WEEK 3
ECO 365 Week3 Discussion Questions1, 2 and 3
ECO 365 Week 3 Learning Team Assignment: Current Market Conditions Competitive analysis
Prepare a 1400 – 1750 word paper analysing the current market conditions of the organization/industry you selected during Week One.  Address the following topics in your analysis:
  • Market Structure
  • Impact of new companies entering the market
  • Prices
  • Productivity (consider law of diminishing marginal utility)
  • Cost structure
  • Wages & Benefits
  • Fixed and Variable Costs
  • Price elasticity of demand
  • Competitors
  • Supply and demand analysis
  • Impact of government regulations
WEEK 4
ECO 365 Week 4 Discussion Questions 1, 2 and 3
ECO 365 Week 4 Individual Assignment: Difference between Market Structures
You will apply important microeconomics concepts toward the competitive strategies of an organization that operates in an industry of your choice. You will evaluate the differences between market structures and identify a group of competitive strategies consistent with the market structure that best aligns with the market in which the organization competes. You will assess how the market structure positively and negatively affects the firm and evaluate the efficacy of the structure’s competitive strategies.
Complete the University of Phoenix Material: Differentiating Between Market Structures Table located on the student website. Compare the various characteristics of the market structures by completing the table.
Write a 1,050 – 1,400-word paper
  • Select an industry. Identify an organization in that industry. Identify the market structure in which this organization competes. Clearly indicate why the market structure was decided upon, and how this market structure differentiates from the other alternatives.
  • Identify three or more competitive strategies of your choice that may be used by the organization to maximize its profits over the long run. Evaluate the efficacy of these strategies in the market structure you identified.
  • Make recommendations related to the strategies the organization might consider to maximize its profits.
  • Format your paper consistent with APA guidelines.
ECO 365 Week 4 Learning Team Assignment: Market Trends Paper
Write a paper of no more than 1,750 words in which you describe market trends your organization or industry will face. Explain your conclusions. Address how each of the following will or will not change, and why:
  • Market structure
  • Effect of new companies entering the market
  • Prices
  • Technology
  • Productivity: Consider the law of diminishing marginal productivity
  • Cost structure
  • Wages and benefits
  • Fixed and variable costs
  • Price elasticity of demand
  • Competitors
  • Supply and demand analysis
  • Effect of government regulations
  • Format your paper consistent with APA guidelines.
WEEK 5
ECO 365 Week 5 Discussion Questions1, 2 and 3
ECO 365 Week 5 Final Project
ALL Discussion Questions
  • What is the definition of price elasticity of demand? Explain the relationship between price elasticity and total revenue? How does price elasticity of demand affect a firm’s pricing decisions? How does the availability of substitutes affect price elasticity of demand? Provide examples.
  • What is the difference between a movement along and shift of the demand curve? Show the impact on the equilibrium price and quantity that results from; (1) an increase in demand, (2) an increase in supply, (3) an increase in both supply and demand. Give an example of the role of supply and demand in decision making.
  • What is economics? What role does economics play in your personal and organizations decisions? Give an example of the role of economics in decision making.
  • What is the difference between a movement along and shift of the demand curve? Show the impact on the equilibrium price and quantity that results from; (1) an increase in demand, (2) an increase in supply, (3) an increase in both supply and demand. Give an example of the role of supply and demand in decision making.
  • What is average productivity? What is marginal productivity? Explain the relationship between marginal and average productivity. What would happen to marginal and average productivity if a technological innovation is introduced to the production process?
  • What is the law of diminishing marginal productivity? Give an example from your workplace of the law of diminishing marginal productivity? Might diminishing marginal productivity impact the costs?
  • Why is the demand of labor a derived demand? Explain the shape of the supply of labor curve. What is the relationship between productivity and the wages earned by an employee? What are some factors that determine the level of your income?
  • What are the conditions for a perfectly competitive market? What are the conditions for a monopolistic market? What are the conditions for a monopolistic competitive market? What are the conditions for an oligopolistic market? How would you explain the differences among these market structures? Identify which market structure your organization competes in and why you think so.
  • What conditions exist when economic profits are maximized? What is the difference between economic and accounting profits? How could you graphically illustrate economic profits made by a perfectly competitive firm; monopolist; and firm competing in a monopolistic competitive market?
  • What are some real-life examples of monopolistically competitive, oligopoly, and monopoly markets? How do market prices differ between perfectly and imperfectly competitive markets? Will a monopoly always produce at a profit-maximizing level of output? Explain your answer.
  • What is an externality? Provide examples. How does an externality affect the market outcome? Is it possible for a government’s solution to a market failure to actually worsen the failure? Explain your answer.
  • What are the differences among horizontal, vertical, and conglomerate mergers? What does the U.S. government hope to achieve through the use of its antitrust policy? How do the resolutions of the IBM®, AT&T®, and Microsoft® antitrust cases differ? How does international competition affect domestic antirust policy?
  • What is the cost/benefit approach that a typical economist takes to analyze regulations? What are the goals of taxation? How are economic policies impacted by politics, and how politics make a positive or a negative contribution to economic policy? How does antitrust policy and regulation affect economic welfare?
  • What are the impacts of innovation and technology on the cost of production? How does technology affect market structure and real-world competition? Which market structure is best suited for technological innovation? Explain your answer. How has technological innovations affected your organization?
  • What factors influence a firm’s competitive strategies? How does global economic competition impact the price elasticity in the domestic market and decisions related to the strategy a firm uses to compete? Why do most economists oppose trade restrictions? Who have been the winners and losers as a result of NAFTA? Explain your answer.
  • How do you define social diversity and business ethics? How has a more diversified labor force affected the corporate structure and the economy? What are some potential roadblocks, ethical or otherwise, in promoting a diverse workplace? Explain your answer.
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ECO 212 Complete Individual & Team Assignments

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ECO 212 Principles of Economics
Individual (70%)
Week 1 – Individual Assignment: How People Make Economic Decisions Paper
Week 2 – Individual Assignment: Supply, Demand and Price Elasticity Quiz
Week 4 – Individual Assignment: Measuring Economic Health Memo
Week 5 – Individual Assignment: Federal Reserve Paper
Learning Team (30%)
Week 2 – Learning Team Assignment: Supply and Demand and Price Elasticity Paper
Week 3 – Learning Team Assignment: Differentiating Between Market Structures Table and Paper
Week 5 – Learning Team Assignment: International Trade Simulation and Report
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ECO 550 MID-Term Exam (New 2014)

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Chapter 1—Introduction and Goals of the Firm
MULTIPLE CHOICE
1. The form of economics most relevant to managerial decision-making within the firm is:
  1. macroeconomics
  2. welfare economics
  3. free-enterprise economics
  4. microeconomics
  5. none of the above
2. If one defines incremental cost as the change in total cost resulting from a decision, and incremental revenue as the change in total revenue resulting from a decision, any business decision is profitable if:
  1. it increases revenue more than costs or reduces costs more than revenue
b. it decreases some costs more than it increases others (assuming revenues remain constant)
c. it increases some revenues more than it decreases others (assuming costs remain constant)
d. all of the above
e. b and c only
3. In the shareholder wealth maximization model, the value of a firm’s stock is equal to the present value of all expected future ____ discounted at the stockholders’ required rate of return.
a. profits (cash flows)
b. revenues
c. outlays
d. costs
e. investments
4. Which of the following statements concerning the shareholder wealth maximization model is (are) true?
a. The timing of future profits is explicitly considered.
b. The model provides a conceptual basis for evaluating differential levels of risk.
c. The model is only valid for dividend-paying firms.
d. a and b
e. a, b, and c
5. According to the profit-maximization goal, the firm should attempt to maximize short-run profits since there is too much uncertainty associated with long-run profits.
a. true
b. false
6. According to the innovation theory of profit, above-normal profits are necessary to compensate the owners of the firm for the risk they assume when making their investments.
a. true
b. false
7. According to the managerial efficiency theory of profit, above-normal profits can arise because of high-quality managerial skills.
a. true
b. false
8. Which of the following (if any) is not a factor affecting the profit performance of firms:
a. differential risk
b. innovation
c. managerial skills
d. existence of monopoly power
e. all of the above are factors
9. Agency problems and costs are incurred whenever the owners of a firm delegate decision-making authority to management.
a. true
b. false
10. Economic profit is defined as the difference between revenue and ____.
a. explicit cost
b. total economic cost
c. implicit cost
d. shareholder wealth
e. none of the above
11. Income tax payments are an example of ____.
a. implicit costs
b. explicit costs
c. normal return on investment
d. shareholder wealth
e. none of the above
12. Various executive compensation plans have been employed to motivate managers to make decisions that maximize shareholder wealth. These include:
a. cash bonuses based on length of service with the firm
b. bonuses for resisting hostile takeovers
c. requiring officers to own stock in the company
d. large corporate staffs
e. a, b, and c only
13. The common factors that give rise to all principal-agent problems include the
a. unobservability of some manager-agent action
b. presence of random disturbances in team production
c. the greater number of agents relative to the number of principals
d. a and b only
e. none of the above
14. The Saturn Corporation (once a division of GM) was permanently closed in 2009.  What went wrong with Saturn?
a. Saturn’s cars sold at prices higher than rivals Honda or Toyota, so they could not sell many cars.
b. Saturn sold cars below the prices of Honda or Toyota, earning a low 3% rate of return.
c. Saturn found that young buyers of Saturn automobiles were very loyal to Saturn and GM.
d. Saturn implemented a change management view that helped make first time Saturn purchasers trade up to Buick or Cadillac.
e. all of the above
15.  A Real Option Value is:
a. An option that been deflated by the cost of living index makes it a “real” option.
b. An opportunity cost of capital.
c. An opportunity to implement a new cost savings or revenue expansion activity that arises from business plans that the managers adopt.
d. An objective function and a decision rule that comes from it.
e. Both a and b.
16. Which of the following will increase (V0), the shareholder wealth maximization model of the firm:
V0∙(shares outstanding) = S¥t=1 (p t ) / (1+ke)t   + Real Option Value.
a. Decrease the required rate of return (ke).
b. Decrease the stream of profits (pt).
c. Decrease the number of periods from ¥ to 10 periods.
d. Decrease the real option value.
e. All of the above.
17. The primary objective of a for-profit firm is to ___________.
a. maximize agency costs
b. minimize average cost
c. maximize total revenue
d. set output where total revenue equals total cost
e maximize shareholder value
18. Possible goals of Not-For-Profit (NFP) enterprises include all of the following EXCEPT:
a. maximize total costs
b. maximize output, subject to a breakeven constraint
c. maximize the happiness of the administrators of the NFP enterprise
d. maximize the utility of the contributors
e. a. and c.
19. The flat-screen plasma TVs are selling extremely well.  The originators of this technology are earning higher profits.  What theory of profit best reflects the performance of the plasma screen makers?
a. risk-bearing theory of profit
b. dynamic equilibrium theory of profit
c. innovation theory of profit
d. managerial efficiency theory of profit
e. stochastic optimization theory of profit
20.  To reduce Agency Problems, executive compensation should be designed to:
a. create incentives so that managers act like owners of the firm.
b. avoid making the executives own shares in the company.
c. be an increasing function of the firm’s expenses.
d. be an increasing function of the sales revenue received by the firm.
e. all of the above
21. Recently, the American Medical Association changed its recommendations on the frequency of pap-smear exams for women.  The new frequency recommendation was designed to address the family histories of the patients.  The optimal frequency should be where the marginal benefit of an additional pap-test: 
a. equals zero.
b. is greater than the marginal cost of the test
c. is lower than the marginal cost of an additional test
d. equals the marginal cost of the test
e. both a and b.
Chapter 2—Fundamental Economic Concepts
MULTIPLE CHOICE
1. A change in the level of an economic activity is desirable and should be undertaken as long as the marginal benefits exceed the ____.
a. marginal returns
b. total costs
c. marginal costs
d. average costs
e. average benefits
2. The level of an economic activity should be increased to the point where the ____ is zero.
a. marginal cost
b. average cost
c. net marginal cost
d. net marginal benefit
e. none of the above
3. The net present value of an investment represents
a. an index of the desirability of the investment
b. the expected contribution of that investment to the goal of shareholder wealth maximization
c. the rate of return expected from the investment
d. a and b only
e. a and c only
4. Generally, investors expect that projects with high expected net present values also will be projects with
a. low risk
b. high risk
c. certain cash flows
d. short lives
e. none of the above
5. An closest example of a risk-free security is
a. General Motors bonds
b. AT&T commercial paper
c. U.S. Government Treasury bills
d. San Francisco municipal bonds
e. an I.O.U. that your cousin promises to pay you $100 in 3 months
6. The standard deviation is appropriate to compare the risk between two investments only if
a. the expected returns from the investments are approximately equal
b. the investments have similar life spans
c. objective estimates of each possible outcome is available
d. the coefficient of variation is equal to 1.0
e. none of the above
7. The approximate probability of a value occurring that is greater than one standard deviation from the mean is approximately (assuming a normal distribution)
a. 68.26%
b. 2.28%
c. 34%
d. 15.87%
e. none of the above
8. Based on risk-return tradeoffs observable in the financial marketplace, which of the following securities would you expect to offer higher expected returns than corporate bonds?
a. U.S. Government bonds
b. municipal bonds
c. common stock
d. commercial paper
e. none of the above
9. The primary difference(s) between the standard deviation and the coefficient of variation as measures of risk are:
a. the coefficient of variation is easier to compute
b. the standard deviation is a measure of relative risk whereas the coefficient of variation is a measure of absolute risk
c. the coefficient of variation is a measure of relative risk whereas the standard deviation is a measure of absolute risk
d. the standard deviation is rarely used in practice whereas the coefficient of variation is widely used
e. c and d
10. The ____ is the ratio of ____ to the ____.
a. standard deviation; covariance; expected value
b. coefficient of variation; expected value; standard deviation
c. correlation coefficient; standard deviation; expected value
d. coefficient of variation; standard deviation; expected value
e. none of the above
11. Sources of positive net present value projects include
a. buyer preferences for established brand names
b. economies of large-scale production and distribution
c. patent control of superior product designs or production techniques
d. a and b only
e. a, b, and c
12. Receiving $100 at the end of the next three years is worth more to me than receiving $260 right now, when my required interest rate is 10%.
a. True
b. False
13.  The number of standard deviations z that a particular value of r is from the mean ȓ can be computed as z = (r – ȓ)/ s.  Suppose that you work as a commission-only insurance agent earning $1,000 per week on average.  Suppose that your standard deviation of weekly earnings is $500.  What is the probability that you zero in a week?  Use the following brief z-table to help with this problem.
Z value Probability
-3 .0013
-2 .0228
-1 .1587
0 .5000
a. 1.3% chance of earning nothing in a week
b. 2.28% chance of earning nothing in a week
c. 15.87% chance of earning nothing in a week
d. 50% chance of earning nothing in a week
e. none of the above
14. Consider an investment with the following payoffs and probabilities:
State of the Economy Probability Return
Stability .50 1,000
Good Growth .50 2,000
Determine the expected return for this investment.
a. 1,300
b. 1,500
c. 1,700
d. 2,000
e. 3,000
15. Consider an investment with the following payoffs and probabilities:
State of the Economy Probability Return
GDP grows slowly .70 1,000
GDP grow fast .30 2,000
Let the expected value in this example be 1,300.  How do we find the standard deviation of the investment?
a. s = Ö { (1000-1300)2 + (2000-1300)2 }
b. s = Ö { (1000-1300) + (2000-1300) }
c. s= Ö { (.5)(1000-1300)2 + (.5)(2000-1300)2 }
d. s= Ö { (.7)(1000-1300) + (.3)(2000-1300) }
e. s= Ö { (.7)(1000-1300)2 + (.3)(2000-1300)2 }
16. An investment advisor plans a portfolio your 85 year old risk-averse grandmother.  Her portfolio currently consists of 60% bonds and 40% blue chip stocks.  This portfolio is estimated to have an expected return of 6% and with a standard deviation 12%.  What is the probability that she makes less than 0% in a year? [A portion of Appendix B1 is given below, where z = (x – m)/s,with mas the mean and sas the standard deviation.]
a. 2.28%
b. 6.68%
c. 15.87%
d. 30.85%
e. 50%
Table B1 for Z
Z       Prob.
-3 .0013
-2.5 .0062
-2. .0228
-1.5 .0668
-1 .1587
-.5 ..3085
0 .5000
17. Two investments have the following expected returns (net present values) and standard deviations:
PROJECT Expected Value Standard Deviation
Q $100,000 $20,000
X   $50,000 $16,000
Based on the Coefficient of Variation, where the C.V. is the standard deviation dividend by the expected value.
a. All coefficients of variation are always the same.
b. Project Q is riskier than Project X
c. Project X is riskier than Project Q
d. Both projects have the same relative risk profile
e. There is not enough information to find the coefficient of variation.
PROBLEMS 
1. Suppose that the firm’s cost function is given in the following schedule (where Q is the level of output):
Output Total
Q (units) Cost
0   7
1 25
2 37
3 45
4 50
5 53
6 58
7 66
8 78
9 96
10   124
Determine the (a) marginal cost and (b) average total cost schedules
2. Complete the following table.
Total Marginal Average
Output Profit Profit Profit
0 -48             0 ______
1 -26   ______ ______
2 -8 ______ ______
3   6 ______ ______
4 16 ______ ______
5 22 ______ ______
6 24 ______ ______
7 22 ______ ______
8 16 ______ ______
9   6 ______ ______
10   -8 ______ ______
3. A firm has decided to invest in a piece of land. Management has estimated that the land can be sold in 5 years for the following possible prices:
Price Probability
10,000 .20
15,000 .30
20,000 .40
25,000 .10
(a) Determine the expected selling price for the land.
(b) Determine the standard deviation of the possible sales prices.
(c) Determine the coefficient of variation.
Chapter 3—Demand Analysis
MULTIPLE CHOICE
1. Suppose we estimate that the demand elasticity for fine leather jackets is  .7 at their current prices.  Then we know that:
a. a 1% increase in price reduces quantity sold by .7%.
b. no one wants to buy leather jackets.
c. demand for leather jackets is elastic.
d. a cut in the prices will increase total revenue.
e. leather jackets are luxury items.
2. If demand were inelastic, then we should immediately:
a. cut the price.
b. keep the price where it is.
c.  go to the Nobel Prize Committee to show we were the first to find an upward sloping demand curve.
d. stop selling it since it is inelastic.
e. raise the price.
3. In this problem, demonstrate your knowledge of percentage rates of change of an entire demand function (HINT: %DQ = EP•%DP + EY•%DY).  You have found that the price elasticity of motor control devices at Allen-Bradley Corporation is -2, and that the income elasticity is a +1.5.  You have been asked to predict sales of these devices for one year into the future.  Economists from the Conference Board predict that income will be rising 3% over the next year, and AB’s management is planning to raise prices 2%.  You expect that the number of AB motor control devices sold in one year will:
a. fall .5%.
b. not change.
c. rise 1%r.
d. rise 2%.
e. rise .5%.
4 A linear demand for lake front cabins on a nearby lake is estimated to be:  QD = 900,000 – 2P.  What is the point price elasticity for lake front cabins at a price of P = $300,000?   [HINT: Ep = (Q/P)(P/Q)]
a. EP = -3.0
b. EP = -2.0
c. EP = -1.0
d. EP = -0.5
e. EP = 0
5. Property taxes are the product of the tax rate (T) and the assessed value (V).  The total property tax collected in your city (P) is:  P = T•V.   If the value of properties rise 4% and if Mayor and City Council reduces the property the tax rate by 2%, what happens to the total amount of property tax collected?  [HINT:  the percentage rate of change of a product is approximately the sum of the percentage rates of change.} 
a. It rises 6 %.
b. It rises 4 %.
c. It rises 3 %.
d. It rises 2 %
e. If falls 2%.
6. Demand is given by QD = 620   10•P and supply is given by QS = 100 + 3•P.  What is the price and quantity when the market is in equilibrium?
a.  The price will be $30 and the quantity will be 132 units.
b.   The price will be $11 and the quantity will be 122 units.
c.   The price will be $40 and the quantity will be 220 units.
d. The price will be $35 and the quantity will be 137 units
e. The price will be $10 and the quantity will be 420 units.
7. Which of the following would tend to make demand INELASTIC?
a. the amount of time analyzed is quite long
b. there are lots of substitutes available
c. the product is highly durable
d. the proportion of the budget spent on the item is very small
e. no one really wants the product at all
8. Which of the following best represents management’s objective(s) in utilizing demand analysis?
a. it provides insights necessary for the effective manipulation of demand
b. it helps to measure the efficiency of the use of company resources
c. it aids in the forecasting of sales and revenues
d. a and b
e. a and c
9. Identify the reasons why the quantity demanded of a product increases as the price of that product decreases.
a. as the price declines, the real income of the consumer increases
b. as the price of product A declines, it makes it more attractive than product B
c. as the price declines, the consumer will always demand more on each successive price reduction.
d. a and b
e. a and c
10. An increase in the quantity demanded could be caused by:
a. an increase in the price of substitute goods
b. a decrease in the price of complementary goods
c. an increase in consumer income levels
d. all of the above
e. none of the above
11. Iron ore is an example of a:
a. durable good
b. producers’ good
c. nondurable good
d. consumer good
e. none of the above
Also include
Chapter 4—Estimating Demand
Chapter 5—Business and Economic Forecasting
Chapter 6—Managing Exports
Chapter 7—Production Economics
Chapter 8—Cost Analysis
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ECO 550 Final Exam (New 2014)

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MULTIPLE CHOICE
1. Evidence from empirical studies of short-run cost-output relationships lends support to the:
a. existence of a non-linear cubic total cost function
b. hypothesis that marginal costs first decrease, then gradually increase over the normal operating range of the firm
c. hypothesis that total costs increase quadratically over the ranges of output examined
d. hypothesis that total costs increase linearly over the range of output examined
e. none of the above
2. The short-run cost function is:
a. where all inputs to the production process are variable
b. relevant to decisions in which one or more inputs to the production process are fixed
c. not relevant to optimal pricing and production output decisions
d. crucial in making optimal investment decisions in new production facilities
e. none of the above
3. Theoretically, in a long-run cost function:
a. all inputs are fixed
b. all inputs are considered variable
c. some inputs are always fixed
d. capital and labor are always combined in fixed proportions
e. b and d
 4. Break-even analysis usually assumes all of the following except:
a. in the short run, there is no distinction between variable and fixed costs.
b. revenue and cost curves are straight-lines throughout the analysis.
c. there appears to be perfect competition since the price is considered to remain the same regardless of quantity.
d. the straight-line cost curve implies that marginal cost is constant.
e. both c and d
5.  What is another term meaning the degree of operating leverage?
a. The measure of the importance of fixed cost.
b. The operating profit elasticity.
c. The measure of business risk.
d. D.O.L.
e. All of the above.
6. In a study of banking by asset size over time, we can find which asset sizes are tending to become more prominent.  The size that is becoming more predominant is presumed to be least cost. This is called:
a. regression to the mean analysis.
b. breakeven analysis.
c. survivorship analysis.
d. engineering cost analysis.
e. a Willie Sutton analysis.
7. George Webb Restaurant collects on the average $5 per customer at its breakfast & lunch diner. Its variable cost per customer averages $3, and its annual fixed cost is $40,000.  If George Webb wants to make a profit of $20,000 per year at the diner, it will have to serve__________ customers per year.
a. 10,000 customers
b. 20,000 customers
c. 30,000 customers
d. 40,000 customers
e. 50,000 customers
8. In determining the shape of the cost-output relationship only ____ depreciation is relevant.
a. direct
b. indirect
c. usage
d. time
e. scheduled
9. Which of the following is not a limitation of the survivor technique for measuring the optimum size of firms within an industry?
a. since the technique does not employ actual cost data in the analysis, there is no way to assess the magnitude of the cost differentials between firms of varying size and efficiency.
b. the managerial and entrepreneurial aspects of the production process are not included in the analysis
c. because of legal factors, the long-run cost curve derived by this technique may be distorted and may not measure the cost curve postulated in economic theory
d. a and b
e. b and c
10. The primary disadvantage of engineering methods for measuring cost functions is that they deal with the managerial and entrepreneurial aspects of the production process or plant.
a. true
b. false
11. A linear total cost function implies that:
a. marginal costs are constant as output increases
b. average total costs are continually decreasing as output increases
c. a and b
d. none of the above
12. A ____ total cost function implies that marginal costs ____ as output is increased.
a. linear; increase linearly
b. quadratic; increase linearly
c. cubic; increase linearly
d. a and b
e. none of the above
13. A ____ total cost function implies that marginal costs ____ as output is increased.
a. linear; increase linearly
b. quadratic; are constant
c. cubic; increase linearly
d. linear; are constant
e. none of the above
14. A ____ total cost function yields a U-shaped average total cost function.
a. cubic
b. quadratic
c. linear
d. a and b only
e. a, b, and c
15. In the linear breakeven model, the difference between selling price per unit and variable cost per unit is referred to as:
a. variable margin per unit
b. variable cost ratio
c. contribution margin per unit
d. target margin per unit
e. none of the above
16. Which of the following is not an assumption of the linear breakeven model:
a. constant selling price per unit
b. decreasing variable cost per unit
c. fixed costs are independent of the output level
d. a single product (or a constant mix of products) is being produced and sold
e. all costs can be classified as fixed or variable
17. In the linear breakeven model, the breakeven sales volume (in dollars) is equal to fixed costs divided by:
a. unit selling price less unit variable cost
b. contribution margin per unit
c. one minus the variable cost ratio
d. a and b only
e. a, b, and c
18. The degree of operating leverage is equal to the ____ change in ____ divided by the ____ change in ____.
a. percentage; sales; percentage; EBIT
b. unit; sales; unit; EBIT
c. percentage; EBIT; percentage; sales
d. unit; EBIT; unit; sales
e. none of the above
19. The linear breakeven model excludes ____ from the analysis.
a. financing costs
b. taxes
c. contribution margin
d. a and b only
e. a, b, and c
20. In the linear breakeven model, the relevant range of output is that range where the linearity assumptions of the model are assumed to hold.
a. true
b. false
  21. In the linear breakeven model, the breakeven sales volume (in dollars) can be found by multiplying the breakeven sales volume (in units) by:
a. one minus the variable cost ratio
b. contribution margin per unit
c. selling price per unit
d. standard deviation of unit sales
e. none of the above
  22. In the linear breakeven model, a firm incurs operating losses whenever output is less than the breakeven level.
a. true
b. false
PROBLEMS
1. For each of the following cost-output relationships, describe the shape (U-shape, decreasing, increasing, constant) of the average total cost and marginal cost functions (C = total cost, Q = output):
(a) C = 42,500,000 + 2550Q
(b) C = 8.48 + 0.65Q + .00220Q2
2. Offshore Petroleum’s fixed costs are $2,500,000 and its debt repayment requirements are $1,000,000. Selling price per barrel of oil is $18 and variable costs per barrel are $10.
(a) Determine the breakeven output (in dollars).
(b) Determine the number of barrels of oil that offshore must produce and sell in order to earn a target (operating) profit of $1,500,000.
(c) Determine the degree of operating leverage at an output of 400,000 barrels.
(d) Assuming that sales of oil are normally distributed with a mean of 362,500 barrels and a standard deviation of 100,000 barrels, determine the probability that Offshore will incur an operating loss.
Chapter 10—Prices, Output, and Strategy: Pure and Monopolistic Competition
MULTIPLE CHOICE
1. The main difference between perfect competition and monopolistic competition is:
a. The number of sellers in the market
b. The ease of entry and exit in the industry
c. The degree of information about market price
d. The degree of product differentiation
e. Whether it is the short run or the long run
2. Long distance telephone service has become a competitive market. The average cost per call is $0.05 a minute, and it’s declining.  The likely reason for the declining price for long distance service is:
a. Governmental pressure to lower the price
b. Reduced demand for long distance service
c. Entry into this industry pushes prices down
d. Lower price for a barrel of crude oil
e. Increased cost of providing long distance service
3. What is the profit maximization point for a firm in a purely competitive environment?
a. The output where P = MC
b. The output where P < MC
c. The output where P > MC
d. The output where MR = MC
e. The output where AVC < P
4. All of the following are true for both competition and monopolistic competition in the long run, except one of them.  Which is it? 
a. P = MC
b. P = AC
c. Economic profits become zero in the long-run
d. The barriers to entry and exit are relatively easy
e. None of the above is an exception
5. Which of the following statements is (are) true concerning a pure competition situation?
a. Its demand curve is represented by a vertical line.
b. Firms must sell at or below market price.
c. Marginal revenue is equal to price.
d. both b and c
e. both a and b
6. In pure competition:
a. the optimal price-output solution occurs at the point where marginal revenue is equal to price
b. a firm’s demand curve is represented by a horizontal line
c. a firm is a price-taker since the products of every producer are perfect substitutes for the products of every other producer
d. a and b only
e. a, b, and c
7. In the short-run for a purely competitive market, a manufacturer will stop production when:
a. the total revenue is less than total costs
b. the contribution to fixed costs is zero or less
c. the price is greater than AVC
d. operating at a loss
e. a and b
8. In the purely competitive case, marginal revenue (MR) is equal to:
a. cost
b. profit
c. price
d. total revenue
e. none of the above
9. In long-run equilibrium, all firms in a pure competition market situation operating under a condition of certainty will have identical costs even though they may use different production and operation techniques.
a. true
b. false
10. If price exceeds average costs under pure competition, ____ firms will enter the industry, supply will ____, and price will be driven ____.
a. more; decrease; down
b. more; decrease; up
c. more; increase; down
d. more; increase; up
e. none of the above
 11. A firm in pure competition would shut down when:
a. price is less than average total cost
b. price is less than average fixed cost
c. price is less than marginal cost
d. price is less than average variable cost
12. In the long-run, firms in a monopolistically competitive industry will
a. earn substantial economic profits
b. tend to just cover costs, including normal profits
c. seek to increase the scale of operations
d. seek to reduce the scale of operations
13. Uncertainty includes all of the following except ____.
a. unknown effects of deliberate actions
b. incomplete information as to the type of competitor
c. random disturbances
d. unverifiable claims
e. accidents due to weather hazards
14. Experience goods are products or services
a. that the customer already knows
b. whose performance is highly unusual
c. whose quality is undetectable when purchased
d. not likely to cause repeat purchases
e. all of the above
15. Buyers anticipate that the temporary warehouse seller of unbranded computer equipment will
a. deliver high quality products consistent with expectations
b. not attempt to establish any warranty enforcement mechanisms
c. offer several prices and qualities
d. produce only one quality
e. none of the above
16. All of the following are mechanisms which reduce the adverse selection problem except ____.
a. warranties from established enterprises with non-redeployable assets
b. high interest rates
c. large collateral requirements
d. brand names and product-specific promotions and retail displays
e. higher prices in repeat customer transactions
17. Asset specificity is largest when
a. value in first best use is large
b. value in second best use is large
c. customers choose their supplier at random
d. very valuable assets are non-redeployable
e. customers are loyal to a particular seller
18. Under asymmetric information,
a. you never get what you pay for
b. you sometimes get cheated
c. you always get cheated
d. at best you get what you pay for
e. sellers make profits in excess of competitive returns
19. To escape adverse selection and elicit high quality experience goods buyers can
a. offer price premiums to new firms in the market
b. seek out unbranded goods
c. buy from generic storefronts that have leased temporary space
d. secure warranties from warehouse retailers
e. none of the above
20. The problems of asymmetric information exchange arise ultimately because
a. one party to the exchange possesses different information than another
b. one party has more information than another
c. one party knows nothing
d. one party cannot independently verify the information of another
e. information is scarce
21. The market for “lemons” is one in which
a. the rational buyer discounts
b. the seller’s product claims are unverifiable at the point of purchase
c. “the bad apples drive out the good”
d. the problem of adverse selection is rampant
e. all of the above
22. The fraudulent delivery of low quality experience goods at high prices is more likely if
a. interest rates decline
b. information about notorious firms is speedily disseminated
c. price premiums for allegedly high quality increase
d. sellers invest in non-transferable reputation
e. none of the above
23. An “experience good” is one that:
a. Only an expert can use
b. Has undetectable quality when purchased
c. Can be readily experienced simply by touching or tasting
d. Improves with age, like a fine wine
e. All of the above
24. A “search good” is:
a. One that depends on how the product behaves over time
b. A product whose quality is only found out over time by finding how durable it is
c. Like a peach that can be examined for flaws
d. Like a used car, since it is easy to determine its inherent quality
e. None of the above
25. The price for used cars is well below the price of new cars of the same general quality.  This is an example of:
a. The Degree of Operating Leverage
b. A Lemon’s Market
c. Redeployment Assets
d. Cyclical Competition
e. The Unemployment Rate
PROBLEMS
1. Sunrise Juice Company sells its output in a perfectly competitive market. The firm’s total cost function is given in the following schedule:
Output Total Cost
(Units) ($)
  0   50
10 120
20 170
30 210
40 260
50 330
60 430
Total costs include a “normal” return on the time (labor services) and capital that the owner has invested in the firm. The prevailing market price is $7 per unit.
(a) Prepare (i) marginal cost and (ii) average total cost schedules for the firm.
(b) What is the firm’s profit maximizing output level?
(c) Is the industry in long-run equilibrium? Justify your answer.
2. Superior Metals Company has seen its sales volume decline over the last few years as the result of rising foreign imports. In order to increase sales (and hopefully, profits), the firm is considering a price reduction on luranium–a metal that it produces and sells. The firm currently sells 60,000 pounds of luranium a year at an average price of $10 per pound. Fixed costs of producing luranium are $250,000. Current variable costs per pound are $5. The firm has determined that the variable cost per pound could be reduced by $.50 if production volume could be increased by 10 percent (fixed costs would remain constant). The firm’s marketing department has estimated the arc elasticity of demand for luranium to be 1.5.
(a) How much would Superior Metals have to reduce the price of luranium in order to achieve a 10 percent increase in the quantity sold?
(b) What would the firm’s (i) total revenue, (ii) total cost, and (iii) total profit be before and after the price cut?
Chapter 11—Price and Output Determination: Monopoly and Dominant Firms
MULTIPLE CHOICE
1. Unique Creations has a monopoly position in magnometers.  If the marginal cost for a magnometer is $50 and the price elasticity for magnometers is -4, what is the optimal monopoly price? 
Hint:  P (1 +1/E) = MC.
a. $37.50
b. $41.25
c. $66.67
d. $75.00
e. $82.50
2. Land’s End estimates a demand curve for turtleneck sweaters to be:
Log Q = .41 + 2.3 Log Y – 3 Log P 
where Q is quantity, P is price, and Y is a measure on national income.  If the marginal cost of imported turtleneck sweaters is $9.00.  (HINT:  P (1 +1/E) = MC).  The optimal monopoly price would be:
a. P = $13.50
b. P = $26.50
c. P = $27.50
d. P = $34.50
e. P = $56.22
3. Declining cost industries
a. have upward rising AC curves.
b. have upward rising demand curves.
c. have Ç-shaped total costs.
d. have diseconomies of scale.
e. have marginal cost curves below their average cost curve.
4. A monopolist seller of Irish ceramics faces the following demand function for its product: P = 62 – 3Q.  The fixed cost is $10 and the variable cost per unit is $2.  What is the maximizing QUANTITY for this monopoly?  Hint:  MR is twice as steep as the inverse demand curve:  MR = 62 – 6 Q. (Pick closest answer)  
a. Q = 10
b. Q = 15
c. Q = 22
d. Q = 37
e. Q = 41
5. Globo Public Supply has $1,000,000 in assets.  Its demand curve is: P = 206 – .20•Q and its total cost function is: TC = 20,000 + 6•Q where TC excludes the cost of capital.  If Globo Public Supply is UNREGULATED, find Globo’s optimal price.
a. $206
b. $106
c. $56
d. $6
e. $3
6. A monopolist faces the following demand curve: P = 12 – .3Q with marginal costs of $3.  What is the monopolistic PRICE?
a. P = $5.50
b. P = $6.50
c. P = $7.50
d. P = $8.50
e. P = $9.50
7.
8.
9.
10.
11.
12.
7. In natural monopoly, AC continuously declines due to economies in distribution or in production, which tends to found in industries which face increasing returns to scale.  If price were set equal to marginal cost, then:
a. price would equal average cost.
b. price would exceed average cost.
c. price would be below average cost.
d. price would be at the profit maximizing level for natural monopoly
e. all of the above
8. The profit maximizing monopolist, faced with a negative-sloping demand curve, will always produce:
a. at an output greater than the output where average costs are minimized
b. at an output short of that output where average costs are minimized
c. at an output equal to industry output under pure competition
d. a and c
e. none of the above
9. In the case of pure monopoly:
a. one firm is the sole producer of a good or service which has no close substitutes
b. the firm’s profit is maximized at the price and output combination where marginal cost equals marginal revenue
c. the demand curve is always elastic
d. a and b only
e. a, b, and c
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ECO 550 Assignment 3: Long-Term Investment Decisions (new 2014)

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Assume that the low-calorie microwavable food company from Assignments 1 and 2 wants to expand and has to make some long-term capital budgeting decisions.
Use the Internet and Strayer databases to research government policies and regulation.
Write a six to eight (6-8) page paper in which you:
  1.  Outline a plan that managers in the low-calorie microwaveable food company could follow when selecting pricing strategies for making their products as inelastic as possible. Provide a rationale for your response.
  2.  Examine the major effects that government policies have on production and employment. Predict the potential effects that government policies could have on your company.
  3.  Determine whether or not government regulation to ensure fairness in the low-calorie microwavable food industry is needed. Cite the major reasons for government involvement in a market economy. Provide two (2) examples of government involvement in a similar market economy to support your response.
  4. Examine the major complexities that would arise under expansion via capital projects. Propose key actions that the company could take in order to prevent or address these complexities.
  5. Suggest the substantive manner in which the company could create a convergence between the interests of stockholders and managers. Indicate the most likely impact to profitability of such a convergence. Provide two (2) examples of instances that support your response.
  1. Use at least five (5) quality academic resources in this assignment. Note: Wikipedia does not qualify as an academic resource.
Your assignment must follow these formatting requirements:
  • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
  • Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
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ECO 550 Assignment 1: Demand Estimation (new 2014)

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Imagine that you work for the maker of a leading brand of low-calorie microwavable food that estimates the following demand equation for its product using data from 26 supermarkets around the country for the month of April.

For a refresher on independent and dependent variables, please go to Sophia’s Website and review the Independent and Dependent Variables tutorial, located at http://www.sophia.org/tutorials/independentand-dependent-variables–3.
Note: Your professor will provide you with the equation and data necessary for you to complete this assignment. You will find this information attached to Assignment 1 within the course shell.
Write a four to six (4-6) page paper in which you:
  1.  Compute the elasticities for each independent variable. Note: Write down all of your calculations.
  2.  Determine the implications for each of the computed elasticities for the business in terms of short term and long-term pricing strategies. Provide a rationale in which you cite your results.
  3. Recommend whether you believe that this firm should or should not cut its price to increase its market share. Provide support for your recommendation.
  4. Assume that all the factors affecting demand in this model remain the same, but that the price has changed. Further assume that the price changes are 100, 200, 300, 400, 500, 600 dollars.
a) Plot the demand curve for the firm.
b) Plot the corresponding supply curve on the same graph using the supply function Q = 5200 + 45P with the same prices.
c) Determine the equilibrium price and quantity.
d) Outline the significant factors that could cause changes in supply and demand for the product. Determine the primary manner in which both the short-term and the long-term changes in market conditions could impact the demand for, and the supply, of the product.
  1. Indicate the crucial factors that could cause rightward shifts and leftward shifts of the demand and supply curves.
  1. Use at least three (3) quality academic resources in this assignment. Note: Wikipedia does not qualify as an academic resource.
Your assignment must follow these formatting requirements:
  • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
  • Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
The specific course learning outcomes associated with this assignment are:
  • Analyze how production and cost functions in the short run and long run affect the strategy of individual firms.
  • Apply the concepts of supply and demand to determine the impact of changes in market conditions in the short run and long run, and the economic impact on a company’s operations.
  • Use technology and information resources to research issues in managerial economics and globalization.
  • Write clearly and concisely about managerial economics and globalization using proper writing mechanics.
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ECO 365 Week 4 Individual Assignment: Difference between Market Structures

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You will apply important microeconomics concepts toward the competitive strategies of an organization that operates in an industry of your choice. You will evaluate the differences between market structures and identify a group of competitive strategies consistent with the market structure that best aligns with the market in which the organization competes. You will assess how the market structure positively and negatively affects the firm and evaluate the efficacy of the structure’s competitive strategies.
Complete the University of Phoenix Material: Differentiating Between Market Structures Table located on the student website. Compare the various characteristics of the market structures by completing the table.
Write a 1,050 – 1,400-word paper
  • Select an industry. Identify an organization in that industry. Identify the market structure in which this organization competes. Clearly indicate why the market structure was decided upon, and how this market structure differentiates from the other alternatives.
  • Identify three or more competitive strategies of your choice that may be used by the organization to maximize its profits over the long run. Evaluate the efficacy of these strategies in the market structure you identified.
  • Make recommendations related to the strategies the organization might consider to maximize its profits.
  • Format your paper consistent with APA guidelines.
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ECO 365 Week 2 Individual Assignment: Supply & Demand Simulation

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Summarize the Supply and Demand Simulation make sure to address the following:
a). What causes the changes in supply and demand in the simulation?
b). How do shifts in supply and demand affect your decision making?
c). List four key points from the reading assignments that were emphasized in the simulation
d). How can you apply what you learned about the concepts of supply and demand from the simulation to your workplace?
e). Determine how price elasticity of demand affects the decision making of the consumer and of the organization
f). Summarize our results of the assessment.
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ECO 365 Entire Course All DQs, Individual & Team Assignments

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WEEK 1
ECO 365 Week 1 Discussion Questions 1, 2 and 3
ECO 365 Week 1 Individual Assignment: Article Analysis Paper
Using the resource Electronic Reserve Readings (ERR) for ECO365, the Course Web Links, University Library, Internet, and/or other sources of literature, locate an article concerning trends in consumption patterns.
Prepare a 1,050-1,400-word paper in which you:
  • Define Economics
  • Define Microeconomics
  • Define Law of Supply
  • Define Law of Demand
  • Identify the factors that lead to a change in supply and a change in demand
  • Analyze the basis for the trends in consumption patterns as discussed in the article. In your analysis, consider the utility derived from the products mentioned in the article, describe what has occurred to change the demand for, or the supply of, the good or service, and market prices of those products or services.  Or to say it differently, make sure to utilize the terms you just defined as tools by which you analyze the article.
WEEK 2
ECO 365 Week 2 Discussion Questions1, 2 and 3
ECO 365 Week 2 Individual Assignment: Supply & Demand Simulation
Summarize the Supply and Demand Simulation make sure to address the following:
a). What causes the changes in supply and demand in the simulation?
b). How do shifts in supply and demand affect your decision making?
c). List four key points from the reading assignments that were emphasized in the simulation
d). How can you apply what you learned about the concepts of supply and demand from the simulation to your workplace?
e). Determine how price elasticity of demand affects the decision making of the consumer and of the organization
f). Summarize our results of the assessment.
ECO 365 Week 2 Learning Team Assignment: Organization Industry Overview
Prepare a 1400 – 1750 word paper analyzing the current market conditions of the organization/industry you selected during Week One.  Address the following topics in your analysis:
Market Structure
Impact of new companies entering the market
Prices
Productivity (consider law of diminishing marginal utility)
Cost structure
Wages & Benefits
Fixed and Variable Costs
Price elasticity of demand
Competitors
Supply and demand analysis
Impact of government regulations
WEEK 3
ECO 365 Week3 Discussion Questions1, 2 and 3
ECO 365 Week 3 Learning Team Assignment: Current Market Conditions Competitive analysis
Prepare a 1400 – 1750 word paper analysing the current market conditions of the organization/industry you selected during Week One.  Address the following topics in your analysis:
  • Market Structure
  • Impact of new companies entering the market
  • Prices
  • Productivity (consider law of diminishing marginal utility)
  • Cost structure
  • Wages & Benefits
  • Fixed and Variable Costs
  • Price elasticity of demand
  • Competitors
  • Supply and demand analysis
  • Impact of government regulations
WEEK 4
ECO 365 Week 4 Discussion Questions 1, 2 and 3
ECO 365 Week 4 Individual Assignment: Difference between Market Structures
You will apply important microeconomics concepts toward the competitive strategies of an organization that operates in an industry of your choice. You will evaluate the differences between market structures and identify a group of competitive strategies consistent with the market structure that best aligns with the market in which the organization competes. You will assess how the market structure positively and negatively affects the firm and evaluate the efficacy of the structure’s competitive strategies.
Complete the University of Phoenix Material: Differentiating Between Market Structures Table located on the student website. Compare the various characteristics of the market structures by completing the table.
Write a 1,050 – 1,400-word paper
  • Select an industry. Identify an organization in that industry. Identify the market structure in which this organization competes. Clearly indicate why the market structure was decided upon, and how this market structure differentiates from the other alternatives.
  • Identify three or more competitive strategies of your choice that may be used by the organization to maximize its profits over the long run. Evaluate the efficacy of these strategies in the market structure you identified.
  • Make recommendations related to the strategies the organization might consider to maximize its profits.
  • Format your paper consistent with APA guidelines.
ECO 365 Week 4 Learning Team Assignment: Market Trends Paper
Write a paper of no more than 1,750 words in which you describe market trends your organization or industry will face. Explain your conclusions. Address how each of the following will or will not change, and why:
  • Market structure
  • Effect of new companies entering the market
  • Prices
  • Technology
  • Productivity: Consider the law of diminishing marginal productivity
  • Cost structure
  • Wages and benefits
  • Fixed and variable costs
  • Price elasticity of demand
  • Competitors
  • Supply and demand analysis
  • Effect of government regulations
  • Format your paper consistent with APA guidelines.
WEEK 5
ECO 365 Week 5 Discussion Questions1, 2 and 3
ECO 365 Week 5 Final Project
ALL Discussion Questions
  • What is the definition of price elasticity of demand? Explain the relationship between price elasticity and total revenue? How does price elasticity of demand affect a firm’s pricing decisions? How does the availability of substitutes affect price elasticity of demand? Provide examples.
  • What is the difference between a movement along and shift of the demand curve? Show the impact on the equilibrium price and quantity that results from; (1) an increase in demand, (2) an increase in supply, (3) an increase in both supply and demand. Give an example of the role of supply and demand in decision making.
  • What is economics? What role does economics play in your personal and organizations decisions? Give an example of the role of economics in decision making.
  • What is the difference between a movement along and shift of the demand curve? Show the impact on the equilibrium price and quantity that results from; (1) an increase in demand, (2) an increase in supply, (3) an increase in both supply and demand. Give an example of the role of supply and demand in decision making.
  • What is average productivity? What is marginal productivity? Explain the relationship between marginal and average productivity. What would happen to marginal and average productivity if a technological innovation is introduced to the production process?
  • What is the law of diminishing marginal productivity? Give an example from your workplace of the law of diminishing marginal productivity? Might diminishing marginal productivity impact the costs?
  • Why is the demand of labor a derived demand? Explain the shape of the supply of labor curve. What is the relationship between productivity and the wages earned by an employee? What are some factors that determine the level of your income?
  • What are the conditions for a perfectly competitive market? What are the conditions for a monopolistic market? What are the conditions for a monopolistic competitive market? What are the conditions for an oligopolistic market? How would you explain the differences among these market structures? Identify which market structure your organization competes in and why you think so.
  • What conditions exist when economic profits are maximized? What is the difference between economic and accounting profits? How could you graphically illustrate economic profits made by a perfectly competitive firm; monopolist; and firm competing in a monopolistic competitive market?
  • What are some real-life examples of monopolistically competitive, oligopoly, and monopoly markets? How do market prices differ between perfectly and imperfectly competitive markets? Will a monopoly always produce at a profit-maximizing level of output? Explain your answer.
  • What is an externality? Provide examples. How does an externality affect the market outcome? Is it possible for a government’s solution to a market failure to actually worsen the failure? Explain your answer.
  • What are the differences among horizontal, vertical, and conglomerate mergers? What does the U.S. government hope to achieve through the use of its antitrust policy? How do the resolutions of the IBM®, AT&T®, and Microsoft® antitrust cases differ? How does international competition affect domestic antirust policy?
  • What is the cost/benefit approach that a typical economist takes to analyze regulations? What are the goals of taxation? How are economic policies impacted by politics, and how politics make a positive or a negative contribution to economic policy? How does antitrust policy and regulation affect economic welfare?
  • What are the impacts of innovation and technology on the cost of production? How does technology affect market structure and real-world competition? Which market structure is best suited for technological innovation? Explain your answer. How has technological innovations affected your organization?
  • What factors influence a firm’s competitive strategies? How does global economic competition impact the price elasticity in the domestic market and decisions related to the strategy a firm uses to compete? Why do most economists oppose trade restrictions? Who have been the winners and losers as a result of NAFTA? Explain your answer.
  • How do you define social diversity and business ethics? How has a more diversified labor force affected the corporate structure and the economy? What are some potential roadblocks, ethical or otherwise, in promoting a diverse workplace? Explain your answer.
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