Assignment:
Select a new, realistic good or service for an existing industry.
Write the economic analysis section of a business proposal. This will include statements about the market structure and the elasticity of demand for the good or service, based on text book principles. You need to create hypothetical data, based on similar real world products to estimate fixed and variable costs.
Required Elements:
• Identify market structure
• Identify elasticity of the product
• Include rationale for the following questions:
o How will pricing relate to elasticity of your product?
o How will changes in the quantity supplied as a result of your pricing decisions affect marginal cost and marginal revenue?
o Besides your pricing decisions, what are your suggested nonpricing strategies? What nonpricing strategies will you use to increase
barriers to entry?
o How could changes in your business operations alter the mix of fixed and variable costs in line with your strategy?
• No more than 1400 words