ECO550
Week 3 Asignment 1 Latest 2017 August
Assignment
1: Demand Estimation
Due Week 3 and worth 200 points
Imagine that you work for the maker of a
leading brand of low-calorie, frozen 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/independent-and-dependent-variables–3.
Option
1
Note: The following is a
regression equation. Standard errors are in parentheses for the demand for
widgets.
QD = – 5200 – 42P + 20PX + 5.2I + 0.20A + 0.25M
(2.002) (17.5) (6.2) (2.5) (0.09) (0.21)
R2 = 0.55 n = 26 F = 4.88
Your supervisor has asked you to compute the
elasticities for each independent variable. Assume the following values for the
independent variables:
Q = Quantity demanded of 3-pack units
P (in cents) = Price of the product = 500 cents per 3-pack unit
PX (in cents) = Price of leading competitor’s product = 600 cents per 3-pack
unit
I (in dollars) = Per capita income of the standard metropolitan statistical
area
(SMSA) in which the supermarkets are located = $5,500
A (in dollars) = Monthly advertising expenditures = $10,000
M = Number of microwave ovens sold in the SMSA in which the
supermarkets are located = 5,000
Option
2
Note: The following is a
regression equation. Standard errors are in parentheses for the demand for
widgets.
QD = -2,000 – 100P + 15A + 25PX + 10I
(5,234) (2.29) (525) (1.75) (1.5)
R2 = 0.85 n = 120 F = 35.25
Your supervisor has asked you to compute the
elasticities for each independent variable. Assume the following values for the
independent variables:
Q = Quantity demanded of 3-pack units
P (in cents) = Price of the product = 200 cents per 3-pack unit
PX (in cents) = Price of leading competitor’s product = 300 cents per 3-pack
unit
I (in dollars) = Per capita income of the standard metropolitan statistical
area
(SMSA) in which the supermarkets are located = $5,000
A (in dollars) = Monthly advertising expenditures = $640
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 cents.
1. Plot
the demand curve for the firm.
2. Plot
the corresponding supply curve on the same graph using the following MC /
supply function Q = -7909.89 + 79.1P with the same prices.
3. Determine
the equilibrium price and quantity.
4. Outline
the significant factors that could cause changes in supply and demand for the
low-calorie, frozen microwavable food. 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.
5. Indicate
the crucial factors that could cause rightward shifts and leftward shifts of
the demand and supply curves for thelow-calorie, frozen microwavable food.
6. 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.
ECO550
Week 6 Asignment 2 Latest 2017 August
Assignment
2: Operations Decision
Due Week 6 and worth 300 points
Using the regression results and the other
computations from Assignment 1, determine the market structure in which the
low-calorie frozen, microwavable food company operates.
Use the Internet to research two (2) of the leading
competitors in the low-calorie frozen, microwavable food industry, and take
note of their pricing strategies, profitability, and their relationships within
the industry (worldwide).
Write a six to eight (6-8) page paper in which
you:
1. Outline
a plan that will assess the effectiveness of the market structure for the
company’s operations.Note:In
Assignment 1, the assumption was that the market structure [or selling
environment] was perfectly competitive and that the equilibrium price was to be
determined by setting QD equal to QS. You are now aware of recent changes in
the selling environment that suggest an imperfectly competitive market where
your firm now has substantial market power in setting its own “optimal” price.
2. Given
that business operations have changed from the market structure specified in
the original scenario in Assignment 1, determine two (2) likely factors that
might have caused the change. Predict the primary manner in which this change
would likely impact business operations in the new market environment.
3. Analyze
the major short run and long cost functions for the low-calorie, frozen
microwaveable food company given the cost functions below. Suggest substantive
ways in which the low-calorie food company may use this information in order to
make decisions in both the short-run and the long-run.
TC =
160,000,000 + 100Q + 0.0063212Q2
VC = 100Q + 0.0063212Q2
MC= 100 + 0.0126424Q
1. Determine
the possible circumstances under which the company should discontinue
operations. Suggest key actions that management should take in order to
confront these circumstances. Provide a rationale for your response.(Hint: Your firm’s price must cover average variable costs in
the short run and average total costs in the long run to continue operations.)
2. Suggest
one (1) pricing policy that will enable your low-calorie, frozen microwavable
food company to maximize profits. Provide a rationale for your suggestion.
(Hints:
- In Assignment 1, you determined
your firm’s market demand equation. Now you need to find the inverse
demand equation. Having found that, find the Total Revenue function for
your firm (TR is P x Q). From your firm’s Total Revenue function, then
find your Marginal Revenue (MR) function. - Use the profit maximization rule
MR = MC to determine your optimal price and optimal output level now that
you have market power. Compare these values with the values you generated
in Assignment 1. Determine whether your price higher is or lower.)
1. Outline
a plan, based on the information provided in the scenario, which the company
could use in order to evaluate its financial performance. Consider all the key
drivers of performance, such as company profit or loss for both the short term
and long term, and the fundamental manner in which each factor influences
managerial decisions.
(Hints:
- Calculate profit in the short run
by using the price and output levels you generated in part 5. Optional:
You may want to compare this to what profit would have been in Assignment
1 using the cost function provided here. - Calculate profit in the long run
by using the output level you generated in part 5 and cost data in part 3
and assuming that the selling environment will likely be very competitive.
Determine why this would be a valid assumption.)
1. Recommend
two (2) actions that the company could take in order to improve its
profitability and deliver more value to its stakeholders. Outline, in brief, a
plan to implement your recommendations.
2. 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.
The specific course learning outcomes
associated with this assignment are:
- Analyze
short-run and long-run production and cost functions. - Apply
macroeconomic concepts to changes in global and national economies and how
they affect economic growth, inflation, interest rates, and wage rates. - Evaluate
the profit-maximizing price and output level for given operating costs for
monopolies and firms in competitive industries. - 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.
ECO550
Week 9 Asignment 3 Latest 2017 August
Assignment
3: Long-Term Investment Decisions
Due Week 9 and worth 300 points
Assume that the low-calorie frozen,
microwavable food company from Assignments 1 and 2 wants to expand and has to
make some long-term capital budgeting decisions. The company is currently
facing increases in the costs of major ingredients.
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, frozen microwaveable food company
could follow in anticipation of raising prices when selecting pricing
strategies for making their products response to a change in price less
elastic. 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,
frozen 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.
6. 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.
The specific course learning outcomes associated
with this assignment are:
- Propose
how differences in demand and elasticity lead managers to develop various
pricing strategies. - Analyze
the economic impact of contracting, governance and organizational form
within organizations. - 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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