The following is a list of the specific required information, research, graphs, and math to be included in each answer regardless of the scenario chosen. 1. Demand Determinants: a. Each individual determinant analyzed for your situation, with examples applicable to your situation (3 points each) and research (2 points each) showing current demand data or most recent past data, except for the expectations determinant in which you need to use data estimating future market conditions. b. (10 points) Price Elasticity of Demand facing you in your scenario, including actual calculation of it using the midpoint formula. If you cant find data, then determine the price elasticity from the characteristics and make up numbers to use. Be sure to identify this if you use this approach. This will help you in deciding the slope of your demand curve below. c. (10 points) Graph the demand facing your situation. Note that this requires information from the supply determinant analysis before deciding how to draw the curve(s), as you may need a separate MR curve. 2. Supply Determinants: a. Each individual determinant analyzed for your situation, with examples applicable to your situation (3 points each) and research (2 points each) showing current supply data or most recent past data, except for the expectations determinant in which you need to use data estimating future market conditions. i. (20 points) You need to be very specific in the cost of production determinant to identify fixed, variable, and marginal cost in order to derive your supply curve for the graphing component. You will need to explain and show how profit maximization or loss minimization output and price are determined. You will need to do the math using actual figures [cited] or your own estimated figures [identified as such] and explain why you expect short run economic or normal profits, acceptable loss or temporary shutdown, and how you will know which it is. ii. The number of sellers determinant must contain your analysis of the kind of market structure in which your firm or labor service will be sold. b. (10 points) Price Elasticity of Supply you have based on the cost of production changes as output changes, including actual calculation of it using the midpoint formula. If you cant find data, then determine the price elasticity from the characteristics and make up numbers to use. Be sure to identify this if you use this approach. This will help you in deciding the slope of your supply curve. c. (10 points) Graph your supply situation using the numbers from your earlier cost of production analysis. 3. Recommendations(40 points) what are your recommendations explained by your analysis? 4. Paper presentation(10 points) good format, citations, lack of spelling errors, etc. Scenario Chosen: Jenny, your niece, is a smart high-school student who wants to make smart choices for her future. Hearing of your course in Business Economics, she has emailed you asking for advice on whether to become a medical doctor and on the best location to practice it. She recognizes the high costs of tuition and the years of study involved in becoming a doctor. She wants to evaluate if that career choice is an optimum decision for her. So she has asked you for advice. Having read the introduction to Chapter 1 on page 3 of the textbook, you recognize the significance of such a career decision for Jenny. You decide to examine the career choice in terms of the utility it provides to Jenny: return on investment as well as personal satisfaction of contributing to the well-being of others. But to evaluate the utility, you also need to identify and quantify the total opportunity costs of the decision. You decide to educate yourself about the market for physicians in terms of supply and demand, elasticity, costs of production, pricing, and normal profit. You want to provide Jenny with the most informed advice possible.
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