Give brief background information about the business, including total revenue/sales, main products, ownership and the location of its headquarters.
Identify two important products / services that this business sells. Describe the products and identify their main characteristics and prices.
Identify two of the main competitors of this firm in the industry. How do their prices compare to the products you identified in (b)?
Identify three costs of production that this firm would incur and briefly explain why they are important. Are these costs fixed or variable costs? Does this company benefit from economies of scale? Explain.
Choose one of the products/services you identified in ‘a’ above. Use demand and supply diagrams and explain how each of the following non-price determinants of demand and supply would affect the equilibrium price and quantity for this product/service. Be sure to label all parts of your diagrams, including, equilibrium prices and quantities.
Consumers’ income: In your explanation, identify if the product/service is a normal or an inferior good.
Prices of competing products/services: In your explanation, identify a competing product/service.
Technology: In your explanation, identify what type of technology would affect this product/service.
Number of consumers: In your explanation, identify what type of consumers (e.g. age, sex, income level) use this product/service.
Number of competitors: In your explanation, identify who the competitors are that would affect this product/service market.
Costs of production: In your explanation, identify one of the types of cost of production.
Part 2. Elasticity (600 – 800 words)
Choose one of the products/services you identified in ‘a’ above.
How would you characterize the price elasticity of demand for this product/service? Draw a diagram showing the price elasticity of demand you identified and explain why you have chosen this price elasticity of demand.
How would you characterize the price elasticity of supply for this product/service? Draw a diagram showing the price elasticity of supply you identified and explain why you have chosen this price elasticity of supply.
How would you characterize the income elasticity of demand for this product/service? Explain.
How would you characterize the cross price elasticity of this product with one of those you products from the companies you mentioned in part (c)? Explain.
Part 3 – Market structure of the firm in this industry (700 – 1,000 words)
Identify and describe the market structure of this business, including, number of firms, type of product, conditions of entry, type of price-setting behavior and existence of non-price competition.
Explain three barriers to entry for firms entering this industry.
Would you consider the companies in this industry to be price takers, price makers or something in-between?
Compare this market structure with equivalent industries in the USA, Europe and Japan. Is the industry in the UAE more or less competitive? Explain.
Considering all of the above, would you recommend to your client to acquire participation in the business studied? Elaborate on the main pros and cons.
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