Project #21836 - Microeconomics ip4

ECON212-1401A-06 Principles of Microeconomics
Task Name: Phase 4 Individual Project
Deliverable Length: 1000-1500 words
Details:

Weekly tasks or assignments (Individual or Group Projects) will be due by Monday and late submissions will be assigned a late penalty in accordance with the late penalty policy found in the syllabus. NOTE: All submission posting times are based on midnight Central Time.

Key Assignment Draft 

You are starting your own Internet business. You decide to form a company that will sell cookbooks online. Justcookbooks.com is scheduled to launch 6 months from today. You estimate that the annual cost of this business will be as follows:

 

Technology (Web design and maintenance)

$5,000

Postage and handling

$1,000

Miscellaneous

$3,000

Inventory of cookbooks

$2,000

Equipment

$4,000

Overhead

$1,000

 

Part I

Deliverable Length: 1 graph plus calculations

You must give up your full-time job, which paid $50,000 per year, and you worked part-time for half of the year.

The average retail price of the cookbooks will be $30, and their average cost will be $20.

Assume that the equation for demand is Q = 40,000 – 500P, where

Q = the number of cookbooks sold per month

P = the retail price of books.

Show what the demand curve would look like if you sold the books between $25 and $35.

Address the following questions:

  1. What is the elasticity of the demand for cookbooks bought this way?
  2. Is the business worth pursuing so far?
  3. Suppose that you expect to sell about 22,000 cookbooks per month online, and assume your overhead, technology, and equipment costs are fixed. What are your total costs?
  4. What are your marginal costs?
  5. What market structure have you entered, and why?
  6. What can you do to guarantee success in this market?
  7. What pricing strategy might you use?

Please submit your assignment.

Click on Student Expectations to view the expectations for this assignment.

Assignment Grading Rubric

For assistance with your assignment, please use your text, Web resources, and all course materials.

Course Materials (1)

Course Materials (1)

Course Materials (2)

Course Materials (2)

Points Possible: 200
Date Due: Monday, Feb 03, 2014
Objective:
  • Describe and apply the economic perspectives of scarcity and opportunity costs.
  • Analyze current news events and apply basic economic concepts to everyday problems and situations.
  • Utilize the tools of economics for decision making for a firm operating in a market economy
  • Cite examples of the various forms of market structure: pure competition, monopolistic competition, oligopoly and monopoly
  • Discuss the impact of current economic trends and realities on politics, the workplace and the quality of individual lives.
Submitted Files: Submit Task
Score: N/A

Subject Business
Due By (Pacific Time) 02/02/2014 06:00 pm
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