Milestone Assignment Guidelines

Overview: In this second milestone assignment for the final project, you will continue your analysis of the economic problem presented in the case study on your selected company (Microsoft, Heinz, or American Airlines). Using the information gathered in the problem statement, you must now frame your company's problem within the context of the appropriate market structure, conducting mathematical and/or statistical calculations that will identify significant trends and relationships to facilitate demand forecasting and potential impacts on profits. Keeping in mind that your audience of corporate decision makers may not be experts in economic theory and data analysis, you must seek to present your information in an easily accessible and understandable way.

Prompt: To complete the second step of this final project, you will submit a theoretical and quantitative analysis that links the problem statement to the relevant economic factors at play. Depending on your company's unique problem, you may look to answer questions such as the following:

- Are customer preferences changing?
- Is there a shift in demand?
- Is there a change in technology?

To answer these questions, include a discussion of demand and its likely elasticity, an application of marginal analysis, and costs in your statement.

Identify and illustrate these trends and relationships using mathematical principles. This will involve use of the proper algebraic, regression, and other quantitative methods to generate scatterplots of your data, highlighting trend lines and outliers as appropriate. You may find it useful to review these mathematical techniques using the following tutorials:

- Describing Relationships in Quantitative Data (Khan Academy)
- Video: Regression Line Example (9:26) (Khan Academy)

To help you accurately perform these calculations, you must use Microsoft Excel and the Excel Analysis TookPak. There is an excellent section in the course textbook on how to perform regression analyses in Excel, but you may find these tutorials also helpful:

- Load the Analysis ToolPak (Microsoft)
- Perform Regression Analysis in Excel 2007 (Microsoft)

Use the knowledge you have gained so far in this course to interpret the data. How might this information be used to make predictions and generate recommendations for action?

To complete your submission, categorize which market structure (pure competition, monopolistic competition, oligopoly, or pure monopoly) applies to your company. Describe this market structure. How does it affect the problem you are researching?

Remember that these tasks draw not only upon your quantitative and data analysis/interpretation skills, but also upon your communication skills. How might you go about presenting your findings to the company's decision makers? Describe how you will present your information in a way that will be understandable to laypeople and will convince them of the merit of your processes (and ultimately, your recommendations).

As a managerial economics student and professional, you are encouraged to use your own experience, understanding, and knowledge of business and industry structure to drive your analysis. Specifically, the following critical elements must be addressed:

I. Research: In this section, you will apply economic theory and quantitative analysis to your research topic.

A. Describe the relationship between the economic factors you identified and the presented issue.
B. Using mathematical concepts, illustrate the relationships between economic factors and the issue.
C. Describe the market structure of your organization's industry.
D. Determine how the market structure of the industry influences the issue. Support your response with relevant examples from the case.

This theoretical and quantitative analysis assignment will be incorporated into the final economic analysis recommendation paper.