Competency
In this project, you will demonstrate your mastery of the following competency:
Inform business decisions using microeconomic models and theories
Scenario
You work for Orizont Consulting, a small but growing economic consulting firm. When you arrive on Monday, you find an email with exciting news:
Date: Tue 10/5/2018 9:17 PM
From: Schmidt, Andreas
Subject: New Project
Attachments: Report Templates (see Supporting Materials)
To all employees,
I am happy to announce that Orizont has secured its first high-profile client. They’ve asked to remain undisclosed for the time being—but I can tell you that this is a huge breakthrough for our little firm!
Now, for the specifics: We’ve been contracted to help inform their future product offerings (all of which are consumer products). We’ll be doing this through a series of detailed economic reports, each on an individual product. They’re looking to get ahead of the curve and want to understand recent or near-future trends. They’re also interested in some of the larger impacts of what they might produce.
We have a lot of work ahead of us, more than any one person can accomplish on their own. I’ve put together a template for us all to use as we create our larger report. Please choose a consumer product and begin your work, using this template as a guide. Your managers will compile them into one streamlined deliverable for our client.
Thank you for your continued great work—we wouldn’t be here without you. Go team!
Andy Schmidt
President
Orizont Consulting
Directions
Product Report:Before getting started, review the email and attachments from Andreas Schmidt, which outline his expectations for your work.
Please note that, for the purposes of this project, you may choose the product to study. Specifically, make sure to choose a product that is a consumer good. Keep in mind that goods are tangible products. For example, soft drinks, clothing, cars, and electronics are all types of consumer goods.
If you are unsure about your choice, you may post to the Public Project Channel in the Discussions area of this competency.
For the product you’ve chosen, consider economic trends (real or hypothetical) that might impact this product. You should come up with at least two: one for supply and one for demand. Some examples that you may use:A change in preferences due to a fashion or health trend
A shift in demographics due to aging populations
An increase or decrease in the input costs (such as cost of raw materials or labor) needed to offer a product
Note: Although research is not required for this step, it is encouraged. See the Supporting Materials section of this project for some recommended databases.
Please note that, while this section is not checked for mastery, it is needed as a basis for the rest of your project.
For each economic trend you consider, describe it according to the determinants of supply and demand. Use the determinants from the following list:Demand: Income, prices of related products, preferences, demographic characteristics, buyer expectations
Supply: Prices of factors of production, technology, returns from alternative activities, the number of sellers, seller expectations, natural events
Using one of the trends that you’ve described above, model the shift in supply or demand for this product. Make sure to use appropriate labels and terminology in your model.Note: To model the shift in supply or demand graphically, you may use the drawing tools in Microsoft Word, or use the graphing tool linked in the Deliverables section and take a screenshot. Alternatively, you may describe the shifts that will occur.
Explain your rationale for this shift (based on the model above) using appropriate economics terminology. As you work, consider the following:The difference between a shift in supply or demand versus a shift in the quantity supplied or demanded
How the equilibrium will shift
The firm is also interested in understanding the elasticity of price for this product within the market. Consider a rise in the price of this product and determine if demand is elastic or inelastic based on an application of the determinants of price elasticity of demand. For each of the determinants in the following list, consider the impact on the elasticity of demand for the product:Availability of substitutes
Time
Importance in household budgets
Luxury or necessity (such as addictions or habits)
The firm is considering how the price of this product might change its demand. Using your determination on elasticity, explain how a price increase would impact revenue for this product.
In addition to the trends and shifts, the company is also interested in understanding possible ramifications of this product on the larger world. Discuss a potential externality of a transaction for this product. It may be positive or negative. For example:Pollution from secondhand smoke or product waste
Education as a result of product use
Bacterial resistance due to overuse of antibiotics
Widespread disease prevention due to vaccinations
What to Submit
Every project has a deliverable or deliverables, which are the files that must be submitted before your project can be assessed. For this project, you must submit the following:
Product Report Template (1,000–1,500 words)
Prepare a report on a product (consumer good) of your choice for the firm. You may submit this report using the Microsoft Word template provided.
To model the shift in supply or demand graphically, you may use the drawing tools in Microsoft Word or use this graphing tool and take a screenshot. Alternatively, you may describe the shifts that will occur.
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In this project, you will demonstrate your mastery of the following c appeared first on Scholars Hub Blog.
