Pick a small company (ice-cream shop, restaurant, bookstore, parking structure or ...) and write a short history about the company, major products, and location.
Determine the factors that will influence demand for their products (be specific)
Determine the factors that will influence supply of their products (be specific)
Pick one of their products andeither calculate or speculate about the price elasticity of demand and the income elasticity of demand for that product. Justify your guess about how elastic the demand is with things you know about the product (for example, the demand for a product is likely to be very price elastic if there are many substitutes). Based on your estimate of price elasticity of demand what would you recommend as far as raising or lowering the price to enhance sales? (TR test).
Finally, identify some complements and substitutes for the product. How strong do you think the cross-price elasticities are likely to be? Based on what you have written, if you were selling this product, what measures, prices, or data would you try to keep track of if you wanted to predict how your sales might change over time?
Explain the nature of cost, fixed and variable, explicit and implicit and sunk cost for your business.
Calculate alternative measures of industry structure, conduct, and performance
Classify the type of business as competitive, monopolistic, oligopolistic or monopolistic competition. Explain your answer based on the characteristics of each market. As a manager which decision variables are relevant to make more profits for the firm?
Is there any particular pricing strategy being used by this Company? ( Like price discrimination, bundling, coupons.)
Show how government regulations impact the prices and quantities of their products.
- Use 12 point Times New Roman font, double-space
- Approximately 2500 words in length
- Number your pages
- Use a creative title for your paper.
Pick a small company (ice-cream shop, restaurant, bookstore, parking structure or ...) and write a short history about the company, major products, and location.
The company I am going to introduce is a home business. The owner runs a website. She does the business by her selves. Her website is https://shop111711384.taobao.com/?spm=a230r.7195193.1997079397.2.LaKlJc
She started the business three years ago. She buys different makeup products from all over the world. She buys the cheapest products and sell it on her own website.
Determine the factors that will influence demand for their products (be specific)
Most time she buys products that her customers ask for. For example, her customers ask can she get an Estée Lauder skincare product. Then she will compare which store sell the cheapest. Then she buy it and mail to the customers. Also her demand will increase when there is a limited edition comes out. She will buy it and then sell it. Holiday time her demand will increase. Because most products will have discount.
Determine the factors that will influence supply of their products (be specific)
Things will influence her supply is that the customs duty, because she buys all the products from different country and then send to her own country, the customs duty will influence the supply. Also if she buys too many products from a website at once. The website may cancel her orders.
Explain the nature of cost, fixed and variable, explicit and implicit and sunk cost for your business.
The sunk cost is the transport charge. Because she buys products out of the country so she will need a transport company to help send her products. The price starts at $6 500g. Variable cost is the free samples she gets every time she purchase. She will sell these free samples so that she get extra profits. Most of her profits is from the samples. She will only add 2%of the regular price of the product.