Determine the impact of economic costs on organizational and individual decision-making
Competencies
In this project, you will demonstrate your mastery of the following competencies:
Inform business decisions using microeconomic models and theories
Determine the impact of economic costs on organizational and individual decision-making
Explain how market structure impacts a business’s entry and exit into a market and its ability to generate economic profit
Overview
For your project, you will research and examine a U.S.-owned, publicly traded company of your choosing. Make sure that you select a company with easily accessible sources of financial data. It is recommended that you either select a company with a narrow product or service or limit your analysis to one area of the firm. For example, you may consider:
Netflix
Tesla
Under Armour
JetBlue Airlines
Ford
Lululemon
Dunkin Donuts
Texas Roadhouse
The Cheesecake Factory
Kroger (grocery stores)
If you choose your own company not on the list above, email your instructor to secure approval.
Directions
Create a report analyzing the microeconomic factors of your selected company. Your economic analysis report should be formatted using the template provided in the What to Submit section below.
You are expected to reference any source material used in your report with appropriate citations. You can also use your textbook to support your claims. To support you, a References page has been added to the project template with a citation for this course’s textbook already provided. Any other references you add should be cited according to APA format.
Specifically, the following sections must be included in your report:
Introduction: Provide a brief description of your selected firm, including what products or services they provide and why you chose this company. Remember that if you choose a company not included in the list above, you need to secure approval from your instructor first.
Comparative Advantage and Specialization: Identify the advantages of specialization for your firm. Provide specific examples of your company’s trading partners to illustrate. You can also include additional evidence from your textbook, such as graphs illustrating the benefits of specialization.
Price Elasticity
Identify the determinants of price elasticity of demand for your selected company. Provide examples from your research to illustrate.
Explain how price elasticity of demand affects pricing decisions and total revenue of your selected firm. Provide examples from your research to illustrate.
Government Policies and Price Equilibrium
Evaluate the potential impacts of policy interventions on the supply and demand equilibrium for a product or service sold by your selected company. Provide examples from your research or from the textbook.
Explain how government policy interventions can cause changes in consumer and producer surplus for your firm. Provide examples from your research or from the textbook to illustrate.
Costs of Production and Decision Making
Describe the difference between variable costs and fixed costs.
Identify several of the fixed costs and variable costs that apply to your company. You can find this information in the company’s financial reports.
Explain how a company makes the decision to produce, shut down in the short term, or exit the market based on these cost considerations. Provide examples from the textbook to illustrate.
Market Structures
Identify the differences between the four market structures and how they impact profitability by addressing the following questions:
Which markets have barriers to entry and exit?
How are the market types profitable in the short and long run?
How is the profit-maximizing quantity determined in each market type?
How is the price determined in each market type? Are the firms price takers or price makers?
Identify the type of market structure in which your company competes. Defend your claim by demonstrating the features of that market structure.
Explain how inefficiencies arise from monopolies and monopolistic competition. Provide examples from the textbook to illustrate.
Analyze how firms in an oligopolistic market set prices. Provide examples from the textbook to illustrate.
Microeconomics Principles and Business Decisions: Conclude by describing the relevance and significance of microeconomics principles. Explain how microeconomic trends could impact the company’s future business decisions. Defend your claims with specific evidence.
What to Submit
To complete this project, you must submit the following:
Economic Analysis Report
Use the Project Template to format your report and submit it as a Word document. Sources should be cited according to APA style.
Supporting Materials
The following resources support your work on the project:
Video: How to Use the Snipping Tool (Beginner’s Guide) (for PC) (5:23)
Use this tutorial for help with snipping, copying, and pasting visuals (if you choose to use them) into your project template.
A captioned version of this video is available: How to Use the Snipping Tool (Beginner’s Guide) (CC).
Resource: Is There a Snipping Tool for Mac?
Use this tutorial for help with snipping, copying, and pasting visuals (if you choose to use them) into your project template.
Resource: APA Style Basics
Use this resource to support your in-line citations and full references in the References section of your project template.
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