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Embed code for: AD - ECO2305 -TeamAssignment (1)
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Lessons 1 to 9
Class, you have been assigned into teams of 4 or 5. You need to amongst yourselves how the duties of the assignment will be divided and the manner in which it will be presented to me. Working together will ensure that all parts will be done well and on time.
Pick a publically traded company that you would like to know more about and print out their annual reports. Become familiar with your company and understand the business and industry in which it operates. Once you become familiar with the company complete the following questions:
1. Provide an overview of your company discussing the industry it which it operates. Briefly discuss its sales and profit levels it reported in the most current year for which its annual reports are available (if you are in a 2012 class for example, you should have access to 2011 annual reports for instance). Briefly discuss the competitors you company faces within the industry and the regulatory environment it which it operates within. (20 marks)
2. Please outline the market structures discussed in class or your textbook. For each market structure, outline the facts that need to be present for such market structures to exist. Be as exhaustive as possible in your answer. This question should be general in nature and not related to your selected company. (8 marks)
3. Having outlined what the different market structures are in 2 above, where does the company you selected fit in the scheme of things? Does your company operate in a perfectly competitive environment or does it fit somewhere else (oligopoly, monopoly, other)? Why or why not. You should ensure that the characteristics that make up a particular market structure are discussed when determining where your company falls. (10 marks)
4. Looking at your companies financial statements discuss what there profit levels are like. What are the accounting profits and how does it differ from economic profits (in general and not related to your company). In your specific case, what is the accounting profits(give a value)? What can we say about economics profits (without being too specific: are they zero or non zero). (10 marks)
5. If the answer to the above suggest that accounting profits and or economic profits are greater than zero, will new entrants to the market result in profits falling over the longer term? If not, what factors present within the industry and marketplace acts as a barrier to entry? Be sure to look at factors specific to your selected company to answer this question. (20 marks)
6. Class, look at the good your company sells. Is the good elastic or inelastic and why? What does this suggest will happen to your company’s profit levels if they decided to increase price or decrease price? If you where a shareholder in the company what would you suggest where would you like to see prices go? Do governments impact the price that you are able to charge? If so, is this good for customers? Why or why not? (12 marks)
7. What is government regulation like in your company’s industry? Does the government employ any regulation designed ensure that competition is healthy or the rights and welfare of consumers is protected. Would you support governments breaking up companies if they become too powerful? Why or why not? Be sure to discuss how consumer and society’s welfare are impacted by firms that exhibit market power? Do you think that governments should always, as a rule, reduce market power of firms that exhibit market power (in order to protect consumer welfare) or should firms be able to grow to be large and power (such as Microsoft)? Would breaking up large companies as a rule eliminate incentives to work hard? (20 marks)
Total Marks: 100%
Team Assignment - ECO2305 Microeconomics