question archive Task 1: Market Analysis Using the models (choose one of these-- Competitive markets, Short-Run and Long-Run Analysis, Elasticity, Government intervention), choose a product, industry and/or firm for the following market analysis
Task 1: Market Analysis Using the models (choose one of these-- Competitive markets, Short-Run and Long-Run Analysis, Elasticity, Government intervention), choose a product, industry and/or firm for the following market analysis
Subject:EconomicsPrice: Bought3
Task 1: Market Analysis Using the models (choose one of these-- Competitive markets, Short-Run and Long-Run Analysis, Elasticity, Government intervention), choose a product, industry and/or firm for the following market analysis. The product/industry/firm you choose should be one for which a recent market change occurred. It can be one in which you have a personal interest. The change you study may, for instance, arise from a change in costs, entry/exit of firms, a change in consumer tastes, or a change in macroeconomic factors (e.g., the recession associated with the COVID-19 pandemic).
(a) Identify and detail the competitive landscape — competitors, substitutes, complements, the value chain (suppliers, buyers, secondary markets).
(b) Attempt to identify (to the extent information is available) or estimate your chosen firm's or product's cost structure (e.g., marginal cost, fixed costs, average total cost, capital charge, exit price, entry price, as relevant to your context)
(c) Attempt to identify the applicable market demand curve by estimating the elasticity of demand (similar to the aluminum case optional exercise #2, using several price/quantity points) and using a single price and quantity point to reverse engineer a linear demand curve (similar to class exercises).
(d) Consider a recent event in this market (demand shift, supply-related shock such as a change in input prices or new market entrants).
Describe the event and its likely impact on demand and/or supply and/or cost structures. If more than one change occurred, decompose the change into single pieces so that your explanation has a step-by-step nature to it. (e) Estimate the short-run and long-run consequences associated with your chosen event on equilibrium price, quantity, and profit both for the individual firm and the relevant market overall.
Task 2: Strategic Analysis (Game Theory) Now, consider some strategic initiative that was or could be adopted by a firm in your chosen market. For instance, this could be a new pricing or product version initiative related to your chosen firm/organization/market.
(i) Detail the initiative (e.g., does the strategy include different pricing schemes or product versions to different groups of customers)? (ii) What would the competitors' likely response to such an initiative be? (iii) How should the firm incorporate what it anticipates competitors will do into its original decision (i.e., regarding its initiative/strategy)?
