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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: 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. 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. 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 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.) 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.) 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.) 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. 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. Click here to view the grading rubric. Points: 300 Criteria Assignment 2: Operations Decision Unacceptable Below 70% F Fair 70-79% C Proficient 80-89% B Satisfactorily outlined a plan that will assess the effectiveness of the market structure for the company's operations. Exemplary 90-100% A 1. Outline a plan Did not submit or that will assess the incompletely effectiveness of the outlined a plan market structure that will assess for the company's the effectiveness operations. of the market Weight: 10% structure for the company's operations. Partially outlined a plan that will assess the effectiveness of the market structure for the company's operations. Thoroughly outlined a plan that will assess the effectiveness of the market structure for the company's operations. 2. Given that Did not submit or business operations incompletely have changed from determined two the market (2) likely factors structure specified that might have in the original caused the scenario in change, given Assignment 1, that business Partially determined Satisfactorily Thoroughly two (2) likely factors determined two determined two that might have caused (2) likely factors (2) likely factors the change, given that that might have that might have business operations caused the caused the have changed from the change, given that change, given that market structure business business specified in the operations have operations have determine two (2) operations have likely factors that changed from the might have caused market structure the change. Predict specified in the the primary manner original scenario in which this in Assignment 1. change would Did not submit or likely impact incompletely business operations predicted the in the new market primary manner environment. in which this Weight: 10% change would likely impact business operations in the new market environment. original scenario in changed from the Assignment 1. market structure Partially predicted the specified in the primary manner in original scenario which this change in Assignment 1. would likely impact Satisfactorily business operations in predicted the the new market primary manner environment. in which this change would likely impact business operations in the new market environment. changed from the market structure specified in the original scenario in Assignment 1. Thoroughly predicted the primary manner in which this change would likely impact business operations in the new market environment. 3. Analyze the Did not submit or Partially analyzed the Satisfactorily Thoroughly major short run and incompletely major short run and analyzed the analyzed the long cost functions analyzed the long cost functions for major short run major short run for the low-calorie, major short run the low-calorie, frozen and long cost and long cost frozen and long cost microwaveable food functions for the functions for the microwaveable functions for the company given the low-calorie, low-calorie, food company low-calorie, provided cost frozen frozen given the cost frozen functions. Partially microwaveable microwaveable functions below. microwaveable suggested substantive food company food company Suggest food company ways in which the given the given the substantive ways in given the low-calorie food provided cost provided cost which the lowprovided cost company may use this functions. functions. calorie food functions. Did not information in order to Satisfactorily Thoroughly company may use submit or make decisions in both suggested suggested this information in incompletely the short-run and the substantive ways substantive ways order to make suggested long-run. in which the low- in which the lowdecisions in both substantive ways calorie food calorie food the short-run and in which the lowcompany may use company may use the long-run. calorie food this information this information Weight: 10% company may use in order to make in order to make this information decisions in both decisions in both in order to make the short-run and the short-run and decisions in both the long-run. the long-run. the short-run and the long-run. 4. Determine the Did not submit or possible incompletely circumstances determined the under which the possible company should circumstances discontinue under which the operations. Suggest company should key actions that discontinue management operations. Did should take in not submit or order to confront incompletely these suggested key circumstances. actions that Provide a rationale management for your response. should take in Weight: 15% order to confront these circumstances. Did not submit or incompletely provided a rationale for your response. Partially determined the possible circumstances under which the company should discontinue operations. Partially suggested key actions that management should take in order to confront these circumstances. Partially provided a rationale for your response. 5. Suggest one (1) Did not submit or Partially suggested pricing policy that incompletely one (1) pricing policy will enable your suggested one (1) that will enable your low-calorie, frozen pricing policy that low-calorie, frozen microwavable food will enable your microwavable food company to low-calorie, company to maximize maximize profits. frozen profits. Partially Provide a rationale microwavable provided a rationale for your food company to for your suggestion. suggestion. maximize profits. Weight: 10% Did not submit or incompletely provided a rationale for your suggestion. 6. Outline a plan, based on the information Satisfactorily determined the possible circumstances under which the company should discontinue operations. Satisfactorily suggested key actions that management should take in order to confront these circumstances. Satisfactorily provided a rationale for your response. Thoroughly determined the possible circumstances under which the company should discontinue operations. Thoroughly suggested key actions that management should take in order to confront these circumstances. Thoroughly provided a rationale for your response. Satisfactorily Thoroughly suggested one (1) suggested one (1) pricing policy that pricing policy that will enable your will enable your low-calorie, low-calorie, frozen frozen microwavable microwavable food company to food company to maximize profits. maximize profits. Satisfactorily Thoroughly provided a provided a rationale for your rationale for your suggestion. suggestion. Did not submit or Partially outlined a Satisfactorily incompletely plan, based on the outlined a plan, outlined a plan, information provided based on the Thoroughly outlined a plan, based on the provided in the based on the in the scenario, which information information scenario, that the information the company could use provided in the provided in the company could use provided in the in order to evaluate its scenario, which scenario, which in order to evaluate scenario, which financial performance. the company the company its financial the company Partially considered could use in order could use in order performance. could use in order all the key drivers of to evaluate its to evaluate its Consider all the to evaluate its performance, such as financial financial key drivers of financial company profit or loss performance. performance. performance, such performance. Did for both the short term Satisfactorily Thoroughly as company profit not submit or and long term, and the considered all the considered all the or loss for both the incompletely fundamental manner key drivers of key drivers of short term and long considered all the in which each factor performance, such performance, such term, and the key drivers of influences managerial as company profit as company profit fundamental performance, such decisions. or loss for both or loss for both manner in which as company profit the short term and the short term and each factor or loss for both long term, and the long term, and the influences the short term and fundamental fundamental managerial long term, and the manner in which manner in which decisions. fundamental each factor each factor Weight: 10% manner in which influences influences each factor managerial managerial influences decisions. decisions. managerial decisions. 7. Recommend two Did not submit or Partially Satisfactorily Thoroughly (2) actions that the incompletely recommended two (2) recommended two recommended two company could recommended two actions that the (2) actions that (2) actions that take in order to (2) actions that company could take in the company the company improve its the company order to improve its could take in could take in profitability and could take in profitability and order to improve order to improve deliver more value order to improve deliver more value to its profitability its profitability to its stakeholders. its profitability its stakeholders. and deliver more and deliver more Outline, in brief, a and deliver more Partially outlined, in value to its value to its plan to implement value to its brief, a plan to stakeholders. stakeholders. your stakeholders. Did implement your Satisfactorily Thoroughly recommendations. not submit or recommendations. outlined, in brief, outlined, in brief, Weight: 10% incompletely a plan to a plan to outlined, in brief, implement your implement your a plan to recommendations. recommendations. implement your recommendations. 8. 5 references Weight: 5% No references provided Does not meet the Meets number of required number of required references; some or all references; all references poor quality references high choices. quality choices. Exceeds number of required references; all references high quality choices. 9. Writing Mechanics, Grammar, and Formatting Weight: 5% Serious and persistent errors in grammar, spelling, punctuation, or formatting. Partially free of errors in grammar, spelling, punctuation, or formatting. Error free or almost error free grammar, spelling, punctuation, or formatting. 10. Appropriate use Lack of in-text of APA in-text citations and / or citations and lack of reference reference section section. Weight: 5% 11. Information Literacy / Integration of Sources Weight: 5% Serious errors in the integration of sources, such as intentional or accidental plagiarism, or failure to use intext citations. 12. Clarity and Coherence of Writing Weight: 5% Information is confusing to the reader and fails to include reasons and evidence that logically support ideas. Mostly free of errors in grammar, spelling, punctuation, or formatting. In-text citations and references are provided, but they are only partially formatted correctly in APA style. In-text citations and references are error free or almost error free and consistently formatted correctly in APA style. Sources are mostly integrated using effective techniques of quoting, paraphrasing, and summarizing. Information is partially clear with minimal reasons and evidence that logically support ideas. Sources are consistently integrated using effective techniques of quoting, paraphrasing, and summarizing. ECO550049VA0161172001 MANAGERIAL ECONOMICS & GLOBALI Week 3 Assignment 1 Submit Here on Sat, Feb 04 2017, 12:24 PM 41% highest match Submission ID: 81b030700f944983b5363e86ee3ed1c0 Word Count: 2,096 Attachment ID: 151297815 41% Citations (6/6) 1. 1Another student's paper 2. 2Another student's paper 3. 3Another student's paper 4. 4Another student's paper 5. 5Another student's paper 6. 6Another student's paper 1 DEMAND ESTIMATION 11 Suspected Entry: 62% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx DEMAND ESTIMATION 11 Source Another student's paper Demand & Supply Estimation Low-calorie, Frozen Microwavable Food Student's Name: Nana Ferguson Professor's Name: Dr. Mohammad Sumadi Course Title: 2 Managerial Economics and Globalization Date: Suspected Entry: 83% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx Managerial Economics and Globalization Date Source Another student's paper Managerial Economics & Globalization February 2, 2017 Running head: LOW-CALORIE, FROZEN MICROWAVABLE FOOD 1 Demand Estimation Demand estimation is useful in assessing the demand for a product during a specific period. It is helpful in making an assessment of the future demand of product provided if the correct assumptions are taken. Avdin, R. et. al. (2014) was of the view that demand estimation plays an important role to compute the financial feasibility of any of the new product to be launched. Option 1 We are provided with the following information: Price of product (P) = 500, Price of product of competitor (PX) = 600, Per capita income (I) = 5500, Advertising expenditure per month (A) = 10,000, Microwave ovens sold (M) = 5000 Following is the provided regression equation for demanded quantity (QD), QD = - 5200 - 42P + 20PX + 5.2I + .20A + 0.25M Substituting the values in regression equation we get, QD = - 5200 - (42 * 500) + (20 * 600) + (5.2 * 5,500) + (0.2 * 10,000) + (0.25 * 5,000) = 17,650 units Calculation of Price elasticity (EP) EP = (Q / P) * (P/QD) Q / P = - 42 (from regression equation) EP = - 42 * (500 / 17,650), EP = 1.19 elastic Income elasticity (Per capita) (EI) EI = (Q / I) * (I/QD) Q / I = 5.2 (from regression equation) EI = 5.2 * (5,500 / 17,650), EI = 1.62 inelastic Cross elasticity (EC) EC = (Q / Px) * (Px / QD) Q / Px = 20 (from regression equation) EC = 20 * (600 / 17,650), EC = 0.68 inelastic Advertisement elasticity (EA) EA = (Q / A) * (A / QD) Q / A = 0.20 (from regression equation) EA = 0.20 * (10,000 / 17,650), EA = 0.11 inelastic Microwave oven elasticity (EM) EM = (Q/M) * (M/QD) Q/M = 0.25 (from regression equation) EM = 0.25 * (5,000 / 17,650), EM = 0.07 inelastic Option 2 We are provided with following information: Price of product (P) = 200, Price of product of competitor (PX) = 300, Per capita income (I) = 5,000, Advertising expenditure per month (A) = 640 Following is the provided regression equation for demanded quantity (QD), QD = - 2,000 - 100P + 15A + 25PX + 10I Substituting the values in regression equation we get, QD = - 2,000 - (100 * 200) + (25 * 300) + (10 * 5,000) + (15 * 640) = 45,100 units Price elasticity (EP) EP = (Q / P) * (P / QD) Q / P = - 100 (from regression equation) EP = - 100 * (200 / 45,100), EP = 0.44 inelastic Cross elasticity (EC) EC = (Q / Px) * (Px / QD) Q/Px = 25 (from regression equation) EC = 25 * (300 / 45,100), EC = 0.17 inelastic Advertisement elasticity (EA) EA = (Q / A) * (A / QD) Q/A = 15 (from regression equation) EA = 15 * (640 / 45,100), EA = 0.21 inelastic Income elasticity (Per capita) (EI) EI = (Q / I) * (I / QD) Q / I = 10 (from regression equation) EI = 10 * (5,000 / 45,100), EI = 1.09 inelastic Implication of Elasticity in Longterm and Short-term Elasticity measures the sensitivity of change in the quantity demanded of two variables. Elasticity is used in finding out the change in the responsiveness of quantity demanded for one variable due to the change in other (McGuigan, et. al, 2014). 3 Price Elasticity Price of the product and income of the consumer are two dependent variables. Suspected Entry: 80% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx Price Elasticity Price of the product and income of the consumer are two dependent variables Source Another student's paper Price Elasticity The two elastic independent variables are the price of the product of the company and income of the consumer They are related in such a manner that if the producer seeks to increase the demand for the product, he would have to slash the price. 4 The demand is more likely to be elastic in long run and is less elastic in short run. Suspected Entry: 68% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx The demand is more likely to be elastic in long run and is less elastic in short run Source Another student's paper In longrun demand tends to be more elastic as compared to shortrun The reason behind such change is that it takes time for the consumer to alter their purchasing habits. The elasticity of price also responds in a similar manner. It takes time for the consumers to respond to change in prices. Owing to the above reason the elasticity of price is negative and works out to be -1.19. Income Elasticity Increase in income of the consumer also increases his purchasing power. Income elasticity explains the change in the quantity demanded as a result of change in the consumers' income McGuigan, et. al, (2014). 3 The elasticity of income is 1.62 which suggests that there will be an increase in the quantity demanded to the extent of 1.62% if the income of consumers will increase by one percent. Suspected Entry: 70% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx The elasticity of income is 1.62 which suggests that there will be an increase in the quantity demanded to the extent of 1.62% if the income of consumers will increase by one percent Source Another student's paper The income elasticity comes at 1.62 and it means that with each one percent change in income the quantity demanded will increase by 1.62% It signifies that the quantity demanded of the product can increase if there is an increase in the income of consumers. 3 Cross Elasticity Cross elasticity refers to the change in quantity demanded of product due to change in the price of any other product. Suspected Entry: 69% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx Cross Elasticity Cross elasticity refers to the change in quantity demanded of product due to change in the price of any other product Source Another student's paper Cross Elasticity Cross elasticity refers to the percentage change in quantity demand of a product to the percentage change in the price of other product on the assumption that all the other factors remain unchanged If the cross elasticity is high it means that the increase in the price of a product will hamper its demand and the product will undergo a fall in demand. 5 The cross elasticity is 0.68 which means that the increase in the price of some other product will increase the demand of your product. Suspected Entry: 68% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx The cross elasticity is 0.68 which means that the increase in the price of some other product will increase the demand of your product Source Another student's paper In this case, the Cross price elasticity is 0.68% which means that the product demand is close to inelasticity Advertising Elasticity Advertising has a positive impact on quantity demanded. Advertising elasticity is used to measure the change in sale of the product as a result of change in the advertising expense. It calculates the change in quantity demanded as a result of decrease or increase in advertising budget. 3 Advertising elasticity of the product is low at 0.11 which suggests that the one percent increase in advertising expenses will only be able to increase the quantity demanded by 0.11%. Suspected Entry: 74% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx Advertising elasticity of the product is low at 0.11 which suggests that the one percent increase in advertising expenses will only be able to increase the quantity demanded by 0.11% Source Another student's paper The advertising elasticity comes to be at 0.11 which means a 1% increase in advertisement expenses will increase the quantity demanded by 0.11% Thus, the company should not increase its advertising budget. Microwave Elasticity Microwave elasticity calculates the change in quantity demanded due to increase in the sale of microwave. 3 The microwave elasticity is 0.07 which suggests a less increase in the quantity demanded of frozen microwavable food from the increase in sale of microwaves. Suspected Entry: 64% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx The microwave elasticity is 0.07 which suggests a less increase in the quantity demanded of frozen microwavable food from the increase in sale of microwaves Source Another student's paper It suggests that with an increase of 1% in the sale of microwaves the quantity demanded would increase by 0.07% Recommendation on Price Cut On the basis of above analysis it is recommended that the price of product should be decreased as it will result in increased sale. 4 Price elasticity is higher than one which suggests that a decrease in the price of product will increase the quantity demanded. Suspected Entry: 64% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx Price elasticity is higher than one which suggests that a decrease in the price of product will increase the quantity demanded Source Another student's paper It means that the quantity demanded of the product will increase provided that there is also a decrease in the price 3 If the elasticity below -1 and there is also a change in sales with relation to change in price which is more than 0, in such a condition decrease in price will lead to increase in demand Lipsey & Chrystal (2007). Suspected Entry: 68% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx If the elasticity below 1 and there is also a change in sales with relation to change in price which is more than 0, in such a condition decrease in price will lead to increase in demand Lipsey & Chrystal (2007) Source Another student's paper Recommendation To Or Not To Cut Price Lipsey & Chrystal (2007) suggested that if the elasticity is less than 1 and the change in total revenue in relation to the change in price is greater than 0, then a decrease in price of the product will result in increase in demand and revenue 6 Thus, decrease in price will lead to increase in quantity demanded. Suspected Entry: 67% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx Thus, decrease in price will lead to increase in quantity demanded Source Another student's paper A unit percentage increase in price of the product will lead to a decrease in the quantity demanded by 1.1898 % Quantity Demanded At Different Price Levels The quantity demanded at different price levels is calculated below: Price of product of competitor (PX) = 600, per capita income (I) = 5500, Advertising expenditure per month (A) = 10,000, Microwave ovens sold (M) = 5000 Quantity demanded if P = 100 cents QD= - 5200 - (42 * 100) + (20 * 600) + (5.2 * 5500) + (0.2 * 10000) + (0.25 * 5000) = 34,450 units Quantity demanded if P = 200 cents QD= - 5200 - (42 * 200) + (20 * 600) + (5.2 * 5500) + (0.2 * 10000) + (0.25 * 5000) = - 5,200 - 8,400 + 12,000 + 28,600 + 2,000 + 1,250 + 34,450 = 30,250 units Quantity demanded if P = 300 cents QD = - 5200 - (42 * 300) + (20 * 600) + (5.2 * 5500) + (0.2 * 10000) + (0.25 * 5000) = - 5,200 - 12,600 +12,000 + 28,600 + 2,000 +1,250 + 34,450 = 26,050 units Quantity demanded if P = 400 cents QD = - 5200 - (42 * 400) + (20x600) + (5.2 * 5500) + (0.2 * 10000) + (0.25 * 5000) = - 5,200 - 16,800 + 12,000 + 28,600 + 2,000 + 1,250 + 34,450 = 21,850 units Quantity demanded if P = 500 cents QD = - 5200 - (42 * 500) + (20 * 600) + (5.2 * 5500) + (0.2 * 10000) + (0.25 * 5000) = - 5,200 - 21,000 + 12,000 + 28,600 + 2,000 + 1,250 + 34,450 = 17,650 units Quantity demanded if P = 600 cents QD = - 5200 - (42 * 600) + (20 * 600) + (5.2 * 5500) + (0.2 * 10000) + (0.25 * 5000) = 5,200 - 25,200 + 12,000 + 28,600 + 2,000 + 1,250 + 34,450 = 13,450 units Demand Curve 4 Supply Curve Supply Function (Q) = -7909.89+79.1P Assuming price of 100 cents Q = 7909.89 + (79.1 * 100) = 0.11 Assuming price of 200 cents Q = 7909.89 + (79.1 * 200) = 7910.11 Assuming price of 300 cents Q = 7909.89 + (79.1 * 300) = 15820.11 Assuming price of 400 cents Q = 7909.89 + (79.1 * 400) = 23730.11 Assuming price of 500 cents Q = 7909.89 + (79.1 * 500) = 31640.11 Assuming price of 600 cents Q = 7909.89 + (79.1 * 600) = 39550.11 Suspected Entry: 82% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx Supply Curve Supply Function (Q) = 7909.89+79.1P Assuming price of 100 cents Q = 7909.89 + (79.1 * 100) = 0.11 Assuming price of 200 cents Q = 7909.89 + (79.1 * 200) = 7910.11 Assuming price of 300 cents Q = 7909.89 + (79.1 * 300) = 15820.11 Assuming price of 400 cents Q = 7909.89 + (79.1 * 400) = 23730.11 Assuming price of 500 cents Q = 7909.89 + (79.1 * 500) = 31640.11 Assuming price of 600 cents Q = 7909.89 + (79.1 * 600) = 39550.11 Source Another student's paper Supply Curve Supply Function = 7909.89+79.1P If the price is 100, Quantity Supplies (Qs) = 7909.89 + (79.1 * 100) = 0.11 If the price is 200, Quantity Supplies (Qs) = 7909.89 + (79.1 * 200) = 7910.11 If the price is 300, Quantity Supplies (Qs) = 7909.89 + (79.1 * 300) = 15820.11 If the price is 400, Quantity Supplies (Qs) = 7909.89 + (79.1 * 400) = 23730.11 If the price is 500, Quantity Supplies (Qs) = 7909.89 + (79.1 * 500) = 31640.11 If the price is 600, Quantity Supplies (Qs) = 7909.89 + (79.1 * 600) = 39550.11 3 Calculation of Equilibrium price QD = - 5,200 - 42 + (20 * 600) + (5.2 * 5,500) + (0.20 * 10,000) + (0.25 * 5000) = - 5,200 - 42 + 12,000 + 28,600 + 2,000 + 1250 QD = 38,650 - 42P We know that quantity supplied (QS) = quantity demanded (QD) - 7,909.89 + 79.1P = 38,650 42P Therefore, equilibrium Price = 384.5 Equilibrium quantity (QEQ) Changing the values in regression equation as per the information provided we get, QD = - 5,200 - (42 * 384.5) + (20 * 600) + (5.2 * 5,500) + (0.20 * 10,000) + (0.25 * 5,000) Therefore, equilibrium Quantity = 22,501 Significant Factors Demand and supply are affected by a number of other factors other than own price of the product. Suspected Entry: 75% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx Calculation of Equilibrium price QD = 5,200 42 + (20 * 600) + (5.2 * 5,500) + (0.20 * 10,000) + (0.25 * 5000) = 5,200 42 + 12,000 + 28,600 + 2,000 + 1250 QD = 38,650 42P We know that quantity supplied (QS) = quantity demanded (QD) 7,909.89 + 79.1P = 38,650 42P Therefore, equilibrium Price = 384.5 Equilibrium quantity (QEQ) Changing the values in regression equation as per the information provided we get, QD = 5,200 (42 * 384.5) + (20 * 600) + (5.2 * 5,500) + (0.20 * 10,000) + (0.25 * 5,000) Therefore, equilibrium Quantity = 22,501 Significant Factors Demand and supply are affected by a number of other factors other than own price of the product Source Another student's paper Equilibrium price QD = 5200 42P + 20PX + 5.2I + 0.20A + 0.25M QD = 5,200 42P + (20*600) + (5.2*5,500) + (0.20*10,000)+ (0.25*5000) = 5,200 42p + 12,000 +28,600 +2,000 + 1250 QD = 38,650 42P We know that demand is equal to supply when quantity demanded is equal to quantity supplies Therefore QS = QD 7,909.89 + 79.1P = 38,650 42P 42P +79.1P = 38,650 + 7,909.89 121.1P = 46,559.89 P = 46,559.89/121.1 Equilibrium Price = 384.5 Equilibrium quantity (QEQ) Substituting the equilibrium price in equation we get Price charged by the competitor is one of significant factors that is responsible for change in demand and supply. The business firms try to increase their market share and to attain it they place their products at lower price as compared to their competitors. The decrease in price by competitor increases the demand of their product and has a negative impact on demand of own product. 3 Taste and preferences of the consumers is the other factors that significantly impacts demand and supply of goods. A change in taste and preferences of the consumers leads to decrease in the demand and supply of existing product. Suspected Entry: 62% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx A change in taste and preferences of the consumers leads to decrease in the demand and supply of existing product Source Another student's paper Change in taste and preferences of consumers can also significantly impact the demand and supply of the goods The reason is that the consumers do not purchase existing goods and expect a change in them. 3 The other significant factor is income of consumer. Suspected Entry: 88% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx The other significant factor is income of consumer Source Another student's paper The other significant factor is change in income of consumer In case if the income of consumer increases, he/she has more money to spend. It increases the ability of the consumer to purchase more goods even at increased price and if the income of consumer decreases his purchasing power also decreases. Factors For Rightward And Leftward Shift Due to the factors discussed above the demand curve shifts rightward or leftward. Owing to some reasons demand curve shift rightwards and due to some reasons it shifts leftward. Farmer, R. 3 (2007) suggests that if the consumer's income level increases or if there is decrease in the price of complementary goods the curve shifts rightward. Suspected Entry: 62% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx (2007) suggests that if the consumer's income level increases or if there is decrease in the price of complementary goods the curve shifts rightward Source Another student's paper (2007) opined that there will be a rightward shift in the demand curve if the income level of consumer rises and also if the price of complementary goods cut down Increase in population is the other reason for rightward shift. More and more the consumers are aware about the low-calorie food more the curve will shift rightward. A leftward shift in the curve is observed when there is a reduction in the income of consumers. 3 The other reason for the shift in curve is the demand of complementary goods. Suspected Entry: 82% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx The other reason for the shift in curve is the demand of complementary goods Source Another student's paper The other reason for leftward shift in demand curve is increase in price of complementary goods If there is an increase in price of complementary goods the demand of own product increases the leads rightward shift of the curve and if the price of complementary goods decreases the curve shifts leftward. A rightward movement in supply curve is observed when there is a break-through in the technology. It results in high production at lower cost. If there is a decrease in the cost of producing, the product the supply curve shifts rightward. The reasons of decrease in the cost of production are low labor cost, reduction in taxes by government or increased subsidies and grants. 3 The factors of leftward shift in supply curve are increase in price of inputs, increased taxes, recession, etc. Suspected Entry: 64% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx The factors of leftward shift in supply curve are increase in price of inputs, increased taxes, recession, etc Source Another student's paper The reasons for leftward shift in supply curve are recession in economy, increase in labor cost, increase in price of raw material etc References McGuigan, Moyer, & Harris (2014). Managerial economics: 3 Applications, strategies and tactics (13th ed.). Suspected Entry: 100% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx Applications, strategies and tactics (13th ed.) Source Another student's paper Applications, strategies and tactics (13th ed.) Mason, OH: Cengage Learning Farmer, R. (2007). 3 Aggregate Demand and Supply. Suspected Entry: 100% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx Aggregate Demand and Supply Source Another student's paper Aggregate Demand and Supply Cambridge: 3 National Bureau of Economic Research. Suspected Entry: 100% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx National Bureau of Economic Research Source Another student's paper National Bureau of Economic Research Aydin, R, et. al. 3 (2014) Market Demand Estimation For New Product Development By Using Fuzzy, Modeling And Discrete Choice Analysis. Suspected Entry: 100% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx (2014) Market Demand Estimation For New Product Development By Using Fuzzy, Modeling And Discrete Choice Analysis Source Another student's paper (2014) Market Demand Estimation For New Product Development By Using Fuzzy, Modeling And Discrete Choice Analysis Retrieved from: 3 http://www.sciencedirect.com/science/article/pii/S0925231214005 244 Lipsey, R.,& Chrystal, K. Suspected Entry: 80% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx http://www.sciencedirect.com/science/article/pii/S0925231214005244 Lipsey, R.,& Chrystal, K Source Another student's paper http://www.sciencedirect.com/science/article/pii/S0925231214005244 Farmer, R (2007). Economics. Oxford: Oxford UP. 3 tactics (13th ed.). Suspected Entry: 71% match Uploaded ECO550Assignment1Ferguson2ndsubmission.docx tactics (13th ed.) Source Another student's paper Applications, strategies and tactics (13th ed.) Mason, OH: Cengage Learning