Managerial Economics ( BUS: 525)
Dr. Farah Hasin
Answer the following questions for a firm. The choice of firm is up to you.
1. Identify the firm’s primary industry by name, its Standard Industrial Classification.
2. Describe the firm’s customers (Households, businesses, schools, governments, etc.) To what extent does the company depend on international customers?
3. What are the major determinants of demand for the firm’s primary product? Explain your choice of variables. If necessary, describe how determinants differ across customer segments. What observable variables might ...view middle of the document...
4. Recall that price elasticity is a function of (i) the number of available substitutes, (ii) the price level relative to customers’ budgets, (iii) and the durability of the product. Describe these factors for the firm’s primary product. Based on this analysis, does the firm face elastic or inelastic demand with regard to its primary product?
5. How would you describe the market structure of the industry in which your firm operates? To arrive at an answer you should discuss (a) the number of competitors, (b) product similarity, (c) barriers to entry, and (d) the importance of non-price competition. (Be sure to define the geographic nature of the market. Is the market best described as local, national, or international?) How much pricing power does the firm have? Are economies of scale a barrier to entry in this industry?
6 Calculate the company’s sales and profit growth rates for (a) the past year and (b) the past three years. Do the same for the firm’s rivals (firms with the same industry classification). Has the firm’s growth rates matched its rivals? Summarize the company’s performance relative to the rivals?
Presentation : Last class.
Date of Submission : On the final exam date.
Size of writing : No limit. That you feel appropriate
Format of Report : Typed.
Important : No report will be accepted after the submission date.
NOTE: THIS IS A GROUP ASSIGNMENT AND NUMBER OF MEMBERS IN A GROUP CANNOT EXCEED FIVE (5).