Course: Managerial Economics
Key objective: discovering zero economic profit in a small-business operating in the perfect competition of market structure.
Setting: As a manager and an entrepreneur, you will face a new challenge – business venture structured on the theory of the firm. You are opening a restaurant in your selected town in the State of NY.
Instruction: You need to apply and discuss relevant economic concepts and tools with supporting data to solve this real-life imitating simulation.
Include also a one-page executive summary for the business plan with assumptions and the goal set, based on the market conditions examined by you.
Make sure that all parts fit in well and make a comprehensive picture with the compromise on the final concept of the business model adopted.
Outline: analyze, based on the demand and supply model, the following issues:
number of meals sold and prices charged,
price elasticity of demand and how to address it in your business
total revenue
possible challenges
fixed costs and variable costs and marginal cost
cost of inputs
total cost and unit cost (average total cost)
diminishing marginal product
economies and diseconomies of scale
total profit and profit per unit.
