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 I. Classify the firm into one of the four basic market models

     A. Select a company from a current business periodical or where you work, and state which market model is represented by this company. Explain your reasoning using a narrative format. (Refer to CHART in Work Book PG. 224). A current business periodical means a business news article that is dated after the first day of this semester. Write about what is happening to the firm today, not what happened last year.

     B. State the basic industry situation and proceed to analyze using the following methodology where appropriate. Be sure to include the six (6) graphs, as indicated.

     c. Watch the supply and demand analysis video series (Steps 1, 2, and 3) provided for you in this module to help you create your supply and demand graphs.

 II. Supply & Demand and the Price System Graphs

      A. What is the current demand situation – is the curve changing (use graphs)?

          Graph #1: Demand Curve and any Changes (CHOOSE ONE):

               1. Curve shift and underlying causes

               2. Movement along the curve and causes

     B. What is the current supply situation – is the curve changing (use graphs)?

          Graph #2: Supply Curve and any Changes (CHOOSE ONE):

               1. Curve shift and underlying causes

               2. Movement along the curve and causes

     C. Market Equilibrium (use graphs)

          Graph #3: Demand & Supply Curves with Changes

               1. Surplus/shortage (where appropriate)

               2. Price ceilings and price floors (where appropriate)

     D. Changes in Income & Results

               1. Superior/normal or inferior goods

     E. Changes in Prices of Related Goods & Results—CHOOSE ONE:

               1. Name a Substitute, complement, or independent goods

III. Costs & Profits:  From the article see if the company is above target (Eco. Profit), on target (Normal profit) or below target (Loss).

     A. Short-run Costs (use graphs)

         Graph #4: Short-run Profit or Loss (use MC, AR, ATC, and AR; shade where appropriate) (refer to Work Book PG. 224)

              1. State whether firm is earning a normal or economic profit, or a loss. Illustrate on graph 4.

              2. State any productivity and pertinent cost problems and the resulting effects on graphs. . Long-run Costs (use graphs)

        Graph #5: Long-run Profit or Loss (use MC, AR, ATC, and AR; shade where appropriate) (refer to Work Book PG. 224)

             1. State whether firm is earning a normal or economic profit, or a loss. Illustrate on graph 5.

        Graph #6: The Planning Curve: LRATC & Optimal Plant Size (Economies & Diseconomies of Scale) (refer to Work Book PG. 181

             1. Graph the LRATC, show economies and diseconomies of scale, and mark with an “X” the company’s position.

IV. Conclusion/Summary

      A. Recapitulation of Findings

      B. How could the economic problem be corrected?

V. Prediction for Future

      A. State your personal prediction for the future. Support your answer.

Note: Your paper must be 4-5 typed pages in length including your graphs. You must include a copy of the article you used in your research. Please attach your article to this paper, You must submit your paper with a proper cover page online by clicking on Submit Assignment in the upper right side of your screen.

Microeconomic 106 Project

Dimensions Exemplary Competent Unacceptable

Classification of
Company

▪ Market Model chosen reflected
characteristics of the company
chosen.

▪ Narrative format of characteristics
clearly defined.

▪ Industry problem well-thought out.

▪ Correct Market Model

▪ selected to represent the company.

▪ Explanation of Market Model
complete.

▪ Industry problem short and not
well-thought out

▪ Incorrect Market Model selected to
represent the company.

▪ Explanation of Market Model
incomplete.

▪ Industry problem not stated.

Demand Curve
▪ Axes and Demand Curve correctly

labeled.

▪ Demand curve had the correct
shape.

▪ Curve shifted in the correct
direction, or was clearly indicated, if
the curve did not shift (movement
along curve).

▪ New Demand Curve or point along
curve correctly labeled.

▪ Explanations clearly given for the
Demand situation.

▪ Axes not labeled correctly.

▪ Demand Curve not correctly labeled.

▪ Demand curve does not have the
correct shape.

▪ Curves did not shift in the correct
direction or it was not indicated, if
the curve did not shift.

▪ New Demand Curve or point along
curve not correctly labeled.

▪ Description of graph very short and
incomplete.

▪ It was not clear why the curve had
shifted.

▪ No labels.

▪ No Demand Curve.

Supply Curve ▪ Axes and Supply Curve correctly
labeled.

▪ All abbreviations clearly labeled.

▪ The curve had the correct shape.

▪ The curve shifted in the correct
direction.

▪ Axes not labeled correctly.

▪ Supply Curve not correctly labeled.

▪ The Supply Curve does not have the
correct shape.

▪ The curves did not shift in the correct
direction or it was not indicated, if
the curve did not shift.

▪ No labels.

▪ No Supply Curve.

Microeconomic 106 Project

▪ It was clearly indicated, if the curve
did not shift.

▪ Explanations were clearly given for
the Supply situation.

▪ New Supply Curve or point along
curve not correctly labeled.

▪ Description of graph very short and
incomplete.

▪ It was not clear why the curve had
shifted.

Supply and Demand
Curves Together

▪ All axes, Demand and Supply Curves
correctly labeled.

▪ Old and new equilibrium prices and
quantities clearly labeled.

▪ Curves had correct shapes.

▪ Curves shifted in the correct directions.

▪ It was clearly indicated, if the curves
did not shift.

▪ Explanations clearly given for Supply
and Demand situations.

▪ Type of good clearly stated and
defined.

▪ Relationship to a different good
clearly stated.

▪ Either the Supply Curve or Demand
Curve did not have the correct shape.

▪ Curves did not shift in the correct
direction.

▪ It was not indicated, if the curves did
not shift.

▪ Old and new equilibrium prices and
quantities not labeled correctly.

▪ Type of good stated not correct.

▪ Relationship to a different good is
not correct.

▪ Either Supply Curve or Demand Curve
missing.

▪ Old and new equilibrium prices not
labeled.

▪ Type of good not stated.

▪ Relationship to a different good not
stated.

Short Run

Profit & Loss
▪ Four appropriate curves drawn.

▪ Curves had correct shapes.

▪ Curves indicated the appropriate
profit/loss position of the firm.

▪ Explanation of profit/loss position in
short-run correct and thorough.

▪ Cost/productivity issues addressed.

▪ Four appropriate curves not drawn.

▪ Curves did not have correct shapes.

▪ Curves did not indicate an appropriate
profit/loss position of the firm.

▪ Explanation of profit/loss position in
short-run incorrect.

▪ Cost/productivity issues not
addressed.

▪ No short run profit/loss curves.

Microeconomic 106 Project

Long Run Profit &
Loss

▪ Four appropriate curves were drawn.

▪ Curves had the correct shapes.

▪ Curves indicated the appropriate
profit/loss position of the firm.

▪ Explanation of profit/loss position in
the long-run was correct and thorough.

▪ Cost/productivity issues were
addressed.

▪ Four appropriate curves were not
drawn.

▪ Curves did not have the correct
shapes.

▪ Curves did not indicate the appropriate
profit/loss position of the firm.

▪ Explanation of profit/loss position in
the long-run was incorrect.

▪ Cost/productivity issues were not
addressed.

▪ No long run profit/ loss curves.

LRATC ▪ LRATC Curve correctly drawn (shape)
and correctly labeled.

▪ Economies and Diseconomies of Scale
clearly indicated.

▪ Company’s position marked with an
“X” on LRATC.

▪ Explanation for the position (“X”)
was correct and thorough.

▪ The LRATC Curve is incorrectly drawn
(shape) and incorrectly labeled.

▪ Economies and Diseconomies of Scale
not drawn correctly.

▪ Company’s position incorrectly
marked on LRATC.

▪ Explanation of the position (“X”) was
incorrect.

▪ No LRATC Curve.

▪ Economies and Diseconomies of Scale
were not drawn.

Conclusion ▪ Recapitulation of findings clearly
stated.

▪ Solutions to economic problems are
well-thought out.

▪ Predictions of the company’s future
are well-supported.

▪ Recapitulation of findings vague.

▪ Solutions to economic problems not
fully addressed.

▪ Predictions of the company’s future
are supported.

▪ No recapitulation of findings

▪ Solutions to economic problems
ignored.

▪ Predictions of the company’s future
not stated or supported.

Company Analysis
▪ Case typed and at least two pages.

▪ Six graphs drawn and fully explained.

▪ Writing clear, flowed well, and easy to
follow; contained no grammatical
errors or typos.

▪ Information well organized and

▪ Case typed, but less than two pages.

▪ Six graphs drawn but not fully
explained.

▪ Writing unclear and difficult to follow;
contained several grammatical errors
and/or typos.

▪ Case not typed.

▪ Less than six graphs drawn.

▪ Writing unclear and could not be
followed; contained major grammatical
errors and/or typos.

Microeconomic 106 Project

well-constructed, major topic headings
used to organize information into
categories that clearly displayed the
content.

▪ Article or interview thorough and
included with the case.

▪ Information not well organized and
while major topic headings were used,
they failed to organize information
into the categories that clearly
displayed the content.

▪ Article or interview not thorough and
included with the case.

▪ Information really unorganized and major
topic headings not used to organize
information into categories that clearly
displayed the content.

▪ Article or interview not included with
the case.

g

$

Profit Loss Breakeven

$ $

Pure Competition

Q Q Q

MC

ATC
D=AR=MR

P

QD

The Firm The Firm The Firm

MC
ATC

D=AR=MR
P

QD

ATC

MC

ATC

D=AR=MRP & ATC

QD

ATC

Area of
economic

profit

Area of
economic

loss Normal
profit

$

Profit Loss
Breakeven

$ $

Pure Monopoly Competition

Q Q Q

MC

ATC

D=AR

P

QD

The Firm The Firm The Firm

MC

ATC

D=AR

P

QD

ATC
MC

ATC

D=AR

P & ATC

QD

ATC

MR

Area of
economic

profit

Area of
economic

loss
Normal
profit

MR
MR

$

Profit Loss Breakeven

$ $

Monopolistic Competition

Q Q Q

MC

ATC

D=AR

P

QD

The Firm The Firm The Firm

MC

ATC

D=AR
P

QD

ATC
MC

ATC

D=AR

P & ATC

QD

ATC

MR

Area of
economic

profit

Area of
economic

loss

Normal
profit

MR MR

$

Profit
Loss Breakeven

$ $

Oligopoly Competition

Q Q Q

MC

ATC

D=AR

P

QD

The Firm The Firm The Firm

MC

ATC

D=AR

P

QD

ATC MC
ATC

D=AR

P & ATC

QD

ATC

MR

Area of
economic

profit

Area of
economic

loss

Normal
profit

MR MR

Long run Average total cost Curve

Cost

Output

Economies
of scale

Constant returns
to scale

Diseconomies
of scale

McDonald’s: M
New Jersey Natural Gas: N
American Airlines: A
Farmer Jones: J

M

N
A

J

Minimum efficient scale