Microeconomics Manual for a business
1. Choose a business with a maximum of $150,000 financial capital (you must use at least 80% of your financial capital ($120,000)). In other words, you cannot spend more than $150,000 on your business. You must show clearly how you spend your financial capital).
2. Develop a START-UP manual for the above business applying MICROECONOMIC concepts and theories.
3. Follow the Outline below:
I. Industry or Business Description (500-650 words) (40%)
A) Introductory description of your business (product/service, customers, competitors, source of financing, other).
B) Industry Dimensions; statistical characteristics.
C) Type of Business Organization: advantages, disadvantages.
D) Factors Requirement: list the inputs required for the production of your product. Classify them as either fixed costs or variable costs.
E) Ease of Entry (market structure, government regulations, capital requirements, scarcity of inputs).
II. Economic Applications
1. Market trends: (150-250 words) (10%)
Use Supply and Demand determinants to explain current trends and predict future trends. Are these trends positive or negative for your business?
2. Differentiation: (150-250 words) (15%)
Differentiation creates market power. How do you intend to differentiate your product from the competition (ex: additional services, location, management, marketing, etc.)
3. Pricing Strategy: (150-250 words) (10%)
Explain your pricing strategy in the context of elasticity, costs of production, and competition (or market structure).
3. Projections of Return for one year (300-450 words: not including tables) (25%)
Profit and Loss Statement (Every month, you MUST generate revenue; in other words, you cannot shut down your business for any month):
Tabulate the following variables for each month of the year: Profits (expected), Total Revenue (expected), Total Costs (projected). Explain any seasonal variations in the variables, if applicable.
Tabulate the following variables for the year: Profits (total), Total Revenue (total), Total Costs (total), Average Cost, Profit per unit.
Writing Format: Students must use American Psychology Association (APA) format and provide supporting references. Simple instructions for APA format are available in the library and online library website. Remember to include your reference list and provide some part of your references (first page or the whole document).
Note: This is a research term project and is not a storytelling. Your grade is mostly based on your research regarding your products and services with supporting documents. Therefore, you must provide references that include academic journals, websites, magazines, newspaper, textbooks and government information in regard with your business (for example: projected costs, prices, revenues and profit). Failure to provide these required references will result in a low grade.
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