Assignment, Macro & Micro economics
Operations Decision
Project description
Use the Internet to research two (2) of the leading competitors in the low-calorie microwavable food industry, and take note of their pricing strategies, profitability, and their relationships within the industry (worldwide).

Note: The following is a regression equation. Standard errors are in parentheses for the demand for widgets.
QD = 20,000 – 10P + 1500A + 5PX + 10I

(5,234) (2.29) (525) (1.75) (1.5)

R2 = 0.85 n = 120 F = 35.25
Your supervisor has asked you to compute the elasticities for each independent variable. Assume the following values for the independent variables:
Q= Quantity demanded
P (in cents) = Price of the product = 8,000
PX (in cents) = Price of leading competitor’s product = 9,000
I (in dollars) = Per capita income of the standard metropolitan statistical area

(SMSA) in which the supermarkets are located = 5,000

A (in dollars)= Monthly advertising expenditures = 64
GUIDELINES FOR THE ASSIGNMENT:
1.Outline a plan that will assess the effectiveness of the market structure for the company’s operations.

2.Suppose the business operations have now changed from the market structure specified in the scenario. 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.

3.Analyze the major short-run and long-run production and cost functions for the low-calorie microwaveable food company. 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.

4.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.

5.Suggest one (1) pricing policy that will enable your low-calorie microwavable food company to maximize profits. Provide a rationale for your suggestion.

6.Outline a plan, based on the information provided in the scenario, that 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.

7.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.

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
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