QUESTION

The Microeconomic Paper tests your ability to apply economic

principles to a business decision. Select one situation from the items

outlined below: A to D. Complete the paper on the selected situation

as specified below. The completed paper is a professional report and

is due in Week 3 (130 points). See the grading rubric at the end of

this document. For sources of data, you can choose from the list

presented at the end of this document.

The following is a list of the specific required information,

research, graphs, and math to be included in each answer regardless of

the scenario chosen.

1. Demand Determinants:

a. Each individual determinant analyzed for your situation, with

examples applicable to your situation (3 points each) and research (2

points each) showing current demand data or most recent past data,

except for the expectations determinant in which you need to use data

estimating future market conditions.

b. (10 points) Price Elasticity of Demand facing you in your

scenario, including actual calculation of it using the midpoint

formula. If you can’t find data, then determine the price elasticity

from the characteristics and make up numbers to use. Be sure to

identify this if you use this approach. This will help you in deciding

the slope of your demand curve below.

c. (5 points) Graph the demand facing your situation. Note that

this requires information from the supply determinant analysis before

deciding how to draw the curve(s), as you may need a separate MR

curve.

2. Supply Determinants:

a. Each individual determinant analyzed for your situation, with

examples applicable to your situation (3 points each) and research (2

points each) showing current supply data or most recent past data,

except for the expectations determinant in which you need to use data

estimating future market conditions.

i. (20 points) You need to be very specific in the cost of

production determinant to identify fixed, variable, and marginal cost

in order to derive your supply curve for the graphing component. You

will need to explain and show how profit maximization or loss

minimization output and price are determined. You will need to do the

math using actual figures [cited] or your own estimated figures

[identified as such] and explain why you expect short run economic or

normal profits, acceptable loss or temporary shutdown, and how you

will know which it is.

ii. The number of sellers determinant must contain your analysis

of the kind of market structure in which your firm or labor service

will be sold.

b. (10 points) Price Elasticity of Supply you have based on the

cost of production changes as output changes, including actual

calculation of it using the midpoint formula. If you can’t find data,

then determine the price elasticity from the characteristics and make

up numbers to use. Be sure to identify this if you use this approach.

This will help you in deciding the slope of your supply curve.

c. (5 points) Graph your supply situation using the numbers from

your earlier cost of production analysis.

3. Recommendations—(40 points) what are your recommendations

explained by your analysis?

Paper presentation—(10 points) good format, citations, lack of

spelling errors, etc

principles to a business decision. Select one situation from the items

outlined below: A to D. Complete the paper on the selected situation

as specified below. The completed paper is a professional report and

is due in Week 3 (130 points). See the grading rubric at the end of

this document. For sources of data, you can choose from the list

presented at the end of this document.

The following is a list of the specific required information,

research, graphs, and math to be included in each answer regardless of

the scenario chosen.

1. Demand Determinants:

a. Each individual determinant analyzed for your situation, with

examples applicable to your situation (3 points each) and research (2

points each) showing current demand data or most recent past data,

except for the expectations determinant in which you need to use data

estimating future market conditions.

b. (10 points) Price Elasticity of Demand facing you in your

scenario, including actual calculation of it using the midpoint

formula. If you can’t find data, then determine the price elasticity

from the characteristics and make up numbers to use. Be sure to

identify this if you use this approach. This will help you in deciding

the slope of your demand curve below.

c. (5 points) Graph the demand facing your situation. Note that

this requires information from the supply determinant analysis before

deciding how to draw the curve(s), as you may need a separate MR

curve.

2. Supply Determinants:

a. Each individual determinant analyzed for your situation, with

examples applicable to your situation (3 points each) and research (2

points each) showing current supply data or most recent past data,

except for the expectations determinant in which you need to use data

estimating future market conditions.

i. (20 points) You need to be very specific in the cost of

production determinant to identify fixed, variable, and marginal cost

in order to derive your supply curve for the graphing component. You

will need to explain and show how profit maximization or loss

minimization output and price are determined. You will need to do the

math using actual figures [cited] or your own estimated figures

[identified as such] and explain why you expect short run economic or

normal profits, acceptable loss or temporary shutdown, and how you

will know which it is.

ii. The number of sellers determinant must contain your analysis

of the kind of market structure in which your firm or labor service

will be sold.

b. (10 points) Price Elasticity of Supply you have based on the

cost of production changes as output changes, including actual

calculation of it using the midpoint formula. If you can’t find data,

then determine the price elasticity from the characteristics and make

up numbers to use. Be sure to identify this if you use this approach.

This will help you in deciding the slope of your supply curve.

c. (5 points) Graph your supply situation using the numbers from

your earlier cost of production analysis.

3. Recommendations—(40 points) what are your recommendations

explained by your analysis?

Paper presentation—(10 points) good format, citations, lack of

spelling errors, etc

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