Assignment:
Part 1:
In 150 + word for both questions answer the following:
1. What are the relationships between fixed, variable, total, average, and marginal costs? Can you give examples of these costs for your organization/company? Do you have any suggestions to lower these costs?
2. Choose a company you are familiar with. Please comment on the elasticity of this company's demand. Factors you may consider include the number of its competitors and the complements/substitutes of its product. Then, using the total revenue rule, comment on whether the company's current price maximizes its revenue.
Part 2
Equilibration is the process of moving between two equilibrium points as a result of some change in supply or demand. Understanding how market equilibrium is sought following such a change is essential for business managers. It is important to understand how economic principles, and specifically supply, demand, and their determents are a part of your everyday business decisions.
Create a PowerPoint presentation using a real world experience in a free market (not government regulated) to describe a change that occurred in supply or demand as a result of world events that led to the need for a move between two equilibrium states. Explain the process of how that movement occurred using behaviors of consumers and suppliers. Graph the movement between the two points as well.
Required Elements:
• Include academic research to support your ideas
• Consider the Law of demand and the determinants of demand
• Consider the Law of supply and the determinants of supply
• Describe Efficient markets theory
• Explain Surplus and shortage
• Deliver the content in 7- to 10-slide Microsoft PowerPoint presentation
• Use University of Phoenix Material: Appendix A to create graphs illustrating the movement between the two equilibrium points and include this in the body of the assignment.
• Your assignment is consistent with APA guidelines. You need to include a cover slide and a slide with all your references. Hint: Please notice that the law of demand/supply describes a movement along the demand/supply while the determinants or shifting parameters of demand/supply move/shift the whole demand/supply. You need to be able to distinguish the two in your explanation. To address the last two points, you need to demonstrate why the market will move from the original equilibrium to a new equilibrium after a shift in demand/supply due to any surplus or shortage at the original equilibrium. You need to explain this in both words and a corresponding diagram. In the diagram, you need to identify both the old and the new equilibrium price and quantity.