Tag: Managerial Economics

Managerial Economics

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You are an economist for the Vanda-Laye Corporation, which produces and distributes outdoor cooking supplies. The company has come under new ownership and management and will be undergoing changes in its product lines and operating structure. As an economist, your responsibilities include examining the market factors that affect success or failure of a product, including the supply and demand for the product, market conditions, and the behavior of competitors with similar products.

The new management has identified several possible investments for the coming year. It has asked you and your team to evaluate the possibilities and make a recommendation to the board of directors. Jorge has identified an opportunity and assigned you the task of making a recommendation on the investment.

Use any product that a company similar to Vanda-Laye might produce.

Tasks:
Summarize the course project including information you have learned each week.
Analyze marketing factors that can contribute the success or failure of a product for a company such as Vanda-Laye.
Evaluate the role capital budgeting can play in the recommendation of a new product.
Explain how government intervention can impact a new product such as the one you chose.
Justify if the product should be recommended. What were the determining factors in this decision?

Managerial Economics

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Keds-the traditional maker of white canvas tennis shoes-was near oblivion in the early 1980s because competitors like Nike, Reebok, Adidas, and Brooks took away many of its customers. If you were at the helm of Keds, what would you have done to turn the company around?

Managerial Economics

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Managerial Economics provides insight on how to make successful business decisions. Please provide your favorite topics discussed and tell why. How can you use the information covered in the next thirty days? Include a minimum of one reference.

 

Managerial Economics

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1. Why should managers use study supply, demand and their elasticities?

2. What is the difference between Accounting and Economic Profit?

Case Study:

3-2 House Closing

You’ve entered into a contract to purchase a new house, and the closing is scheduled for next week. It’s typical for some last-minute bargaining to occur at the closing table, where sellers often try to tack on extra fees. You have three options for the closing: (1) attend yourself, (2) send an attorney authorized to close only per the previously negotiated terms, or (3) pre-sign all the closing documents per the current terms and not attend the closing. Consider each bargaining position; which position would you go with and why?

 

Managerial Economics

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Prepare a report on the market for organic foods in the United States. The paper is to be a report on the market for organics, using the determinants of demand, determinants of supply, and how supply and demand determine price. The focus of the paper should not be on the health benefits of generic goods, but on the demand, supply and price dynamics of the market for generic foods.

Managerial Economics

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Prepare a report on the market for organic foods in the United States. The paper is to be a report on the market for organics, using the determinants of demand, determinants of supply, and how supply and demand determine price. The focus of the paper should not be on the health benefits of generic goods, but on the demand, supply and price dynamics of the market for generic foods.

Managerial Economics

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In your Managerial Economics textbook, we consider a sequential-move game in which an entrant is considering entering an industry in competition with an incumbent firm (see Figure 15-1). There are several possibilities of how this sequential game will be played. We want to use the Froeb rule of “look ahead and reason back.”

Instructions
For your discussion post, use Figure 15-1 from the textbook as your starting point to address the following:

Can, and how does, the entrant succeed? Is the incumbent ever in control of this game?
You may wish to review the old game known as Duopoly, as well as Antoine-Augustin Cournot, to help inform your post.

Managerial Economics

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1) Show in a diagram the effect on the demand curve, the supply curve, the equilibrium price, and the equilibrium quantity of each of the following events.
a. The market for newspapers in your town
Case 1: The salaries of journalists go up.
Case 2: There is a big news event in your town, which is reported in the newspapers.
b. The market for St. Louis Rams (a professional football team) cotton T-shirts Case 1: The Rams win the Super Bowl competition.
Case 2: The price of cotton increases.
c. The market for bagels
Case 1: People realize how fattening bagels are.
Case 2: People have less time to make themselves a cooked breakfast.
d. The market for the Krugman and Wells economics textbook
Case 1: Your professor makes it required reading for all of his or her students. Case 2: Printing costs for textbooks are lowered by the use of synthetic paper.
2) Explain the features of Perfect Competition with examples.

3) Explain graphically, at what point the firm should stop hiring worker in a perfect competitive market form. Also, list down some of the characteristics of the market form.

4) Demand of a product is usually very sensitive to economic variables, such as the prices and consumer income. This responsiveness of demand is elasticity. Compute elasticity in the below scenarios:
a. Yesterday, the price of envelopes was $3 a box, and Jacky was willing to buy 10 boxes. Today, the price has gone up to $3.75 a box, and Jacky is now willing to buy 8 boxes. Is Jacky’s demand for envelopes elastic or inelastic? What is Jacky’s elasticity of demand?
b. Katy advertises to sell cookies for $4 a dozen. She sells 50 dozen, and decides that she can charge more. She raises the price to $6 a dozen and sells 40 dozen. What is the elasticity of demand? Assuming that the elasticity of demand is constant, how many would she sell if the price were $10 a box?

5) A market failure occurs when the supply of a good or service is insufficient to meet demand. This results in an inefficient distribution of resources among market participants. Hence government need to intervene to bring efficiencies. Explain any four tools available for government interventions to deal with the market failures with suitable examples.

SECTION “B”
Answer the below questions. Each question carries 25 marks. (Word Limit- 1000 )

1) Answer the following:
a. Discuss briefly the supply schedule and the various factors affecting the supply in the market.
b. Assume the demand being perfectly inelastic, and supply suddenly doubles due to innovative technique of production. Illustrate in a well labelled graph, the changes in the equilibrium price, and quantity, and also is it advisable to do so from supplier point of view.

2) The Telecommunications Regulatory Authority (TRA) is the UAE’s independent industry regulator. Since its launch in 1976, Etisalat has held a monopoly in the market. That changed in 2006 with the emergence of du, which was awarded a 20-year concession to operate fixed-line, wireless, internet and international telecoms services. UAE-based telecom operator recently announced that it was launching Virgin Mobile as a new telecom brand within the country. Assuming the trend continues and the government opens the market for more private and foreign players. You are required to –
a. Apply your understanding and concepts from microeconomics, to investigate and summarize the major characteristics of the emerging market form in the telecom industry.
b. Describe and analyze the pricing policies that you would expect to find in this industry.
c. Explain the profit maximization strategy of this market form with the help of a suitable graph.

Managerial Economics

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1) Show in a diagram the effect on the demand curve, the supply curve, the equilibrium price, and the equilibrium quantity of each of the following events.
a. The market for newspapers in your town
Case 1: The salaries of journalists go up.
Case 2: There is a big news event in your town, which is reported in the newspapers.
b. The market for St. Louis Rams (a professional football team) cotton T-shirts Case 1: The Rams win the Super Bowl competition.
Case 2: The price of cotton increases.
c. The market for bagels
Case 1: People realize how fattening bagels are.
Case 2: People have less time to make themselves a cooked breakfast.
d. The market for the Krugman and Wells economics textbook
Case 1: Your professor makes it required reading for all of his or her students. Case 2: Printing costs for textbooks are lowered by the use of synthetic paper.
2) Explain the features of Perfect Competition with examples.

3) Explain graphically, at what point the firm should stop hiring worker in a perfect competitive market form. Also, list down some of the characteristics of the market form.

4) Demand of a product is usually very sensitive to economic variables, such as the prices and consumer income. This responsiveness of demand is elasticity. Compute elasticity in the below scenarios:
a. Yesterday, the price of envelopes was $3 a box, and Jacky was willing to buy 10 boxes. Today, the price has gone up to $3.75 a box, and Jacky is now willing to buy 8 boxes. Is Jacky’s demand for envelopes elastic or inelastic? What is Jacky’s elasticity of demand?
b. Katy advertises to sell cookies for $4 a dozen. She sells 50 dozen, and decides that she can charge more. She raises the price to $6 a dozen and sells 40 dozen. What is the elasticity of demand? Assuming that the elasticity of demand is constant, how many would she sell if the price were $10 a box?

 

 

Managerial Economics

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A firm’s capital structure is determined by more than just a component cost for each source of capital and is not fixed over time. Rather, the capital structure of a firm is determined by conditions in the domestic and international economies and it should also reflect changing conditions in the economy. In other words, the relationship between risk and return should be the major consideration in establishing the capital structure of the firm and the value of the firm.

Address all of the following questions in a brief but thorough manner.

What is the basic relationship between risk and return and how is this reflected in the value of the firm’s stock? The cost of debt?
What are the primary factors that should be considered when establishing a firm’s capital structure?
What are the primary differences and/or similarities between financial risk and business risk?