General Information and Project Requirements As I mentioned in the class, the course project for our class is designed to be submitted in lieu of a term paper. Please read the following instruction...

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General Information and Project Requirements

As I mentioned in the class, the course project for our class is designed to be submitted in lieu of a term
paper. Please read the following instruction extremely carefully and follow the guidelines exactly, in order to
eceive full credit.

My expectation is that you work on the project diligently and present it as if you are presenting it to the upper
management of your company or potential investors for your product. This will allow you to learn the art of
presenting your research in a professional and presentable manner. As such, I do assign points to the elegance
and clarity of your presentation. As a manager in your prestigious business, you should also carefully read
this project and its instructions, as if assigned to you by the upper management of the company and be sure you
understand what is being asked of you. For example, even though you are encouraged to use formulas and
show your mathematical work, your final paper should NOT be a series of formulas and equation as if you are
submitting a math problem. In order to get credit for the presentation, be sure to explain your math in clear and
concise English language.

You are allowed to work on this project with a partner. THIS IS NOT MANDATORY. If you choose a
partner, you will work on the project together and submit the exact same project with both of your names as
authors. Both partners must upload the same project under their own name on Blackboard.

All submissions should be electronic. I don’t accept paper copies. You should submit your work on
Blackboard in the form of a Microsoft Word. Please avoid sending your work in PDF, Page, or other formats,
none of which will be accepted. University computers have MS Word and you should be able to convert files
to Word. I DO NOT ACCEPT OTHER FORMATS. If you have any question about how to submit your
project electronically, please contact me prior to the due date. Technical failure to submit your
project electronically will not be accepted as reason for late or no submission. Please do NOT take a photo
of your presentation and post it. Also your paper should not be hand-written as you would not make a
presentation to your professional organization in your handwriting.

Be sure to answer each section of the assignment clearly and in the same sequence shown in the project
description. Your answers should include the Question Number and, when applicable, its section number. For
example, do NOT answer section 1, after having answered section 4, and then followed by section 2! Please
clearly mark each section and please don’t expect me to guess what section your answers belong to. If your
answer is not placed within the pertinent and identifiable section, it will NOT receive any credit. Moreover,
your answers should contain explanation of what you are doing and why. A simple yes or no answer, or
simply providing the numerical answer without any explanation will not be sufficient. This is NOT a math
problem and your detailed work should be shown with explanation. This means for every major calculation or
formulation, you should show and explain your work. Remember, you are presenting this to the VP or other
officers of your company, who may not understand technical terms and expect you to explain unfamiliar terms.

Your presentation should follow APA. Make sure you submission is double-spaced in MS Word. Information
about APA format can be obtained from these sources:
https:
owl.purdue.edu/owl
esearch_and_citation/apa_style/apa_formatting_and_style_guide
eference_list_ele
ctronic_sources.html
https:
www.youtube.com/watch?v=8u47x2dvQHs

With this introduction, please proceed to read the Project Description.

https:
owl.purdue.edu/owl
esearch_and_citation/apa_style/apa_formatting_and_style_guide
eference_list_electronic_sources.html
https:
owl.purdue.edu/owl
esearch_and_citation/apa_style/apa_formatting_and_style_guide
eference_list_electronic_sources.html
https:
www.youtube.com/watch?v=8u47x2dvQHs

Assignments
Economic 380 Course Project

This is your course project, and it is based on what we covered in Chapter 2 and Chapter
6. You will do well to review those chapters and lecture notes.

Your assignment is to create a product for your future business. This could be a real or
an imaginary product, or a product that is competing with an existing one. The objective
of this exercise is to use your expertise about your product to estimate an inverse demand
equation for your product. This demand function is supposed to help you a
ive at a
pricing strategy that is best for your business. In other words, the purpose of this project
is to find an optimal price for your product and produce an optimal quantity of output.
For this project, you should start with a general and
ief description of your product and
its characteristics. You are considered to be “the” expert for your product and know the
market very well.

Based on this general overview, the assignment requires answering the following
questions. The format of your presentation should be based on the description given in
the document titled “General Information and Requirements for Assignments.pdf”.
Briefly, your submission must be highly professional and well-written as if you are
presenting it to the investors in your business or the upper management of your company.
Therefore, hand-written descriptions will NOT be acceptable. Following the instructions
described in that document is extremely important and your grade will be based on
presenting your project using this format.

Finally, Please write up the questions as shown below and then provide your answers
ight under it with a different font or a different visible color, so that I know what
question you are answering. If you choose to skip a question (which I don’t recommend),
simply write the question anyway, and leave the answer part blank. Please strictly adhere
to this format.

Constructing a Demand Equation For Your Product

1. (5 Points) Describe your product and its characteristics (What is it, how is it used). I
emphasize that you are the one who knows the most about your product. Therefore,
if any description or estimation does not conform to common sense, it indicates that
you are not familiar with your product and with the assignment.
2. (10 Points) As you recall, we discussed the “inverse demand equation” of the
functional form:
?? = ?? − ?? ??

Where P is the price of the product and Q is quantity demanded. There are two
parameters in this equation: the intercept “a”, and the slope “b”, with which you are
now very familiar. If you don’t remember what these are, please refer to lecture notes
and refresh your memory. The assignment is asking that you to use this form of the
demand function [not the direct demand equation] to estimate the parameters of the
equation.

To construct the demand for your product, you must come up with your best
guess/estimate of “a” and “b”. Your estimate should not be a random number or an
a
itrary number. Being the expert for your product, your estimate of the
intercept “a”, and the slope “b” should make economic sense and be consistent
with the nature of your product. You must show the reason(s) why you have
chosen a specific value for “a” and “b” because if these estimates are not reasonable,
then the demand equation you will construct will be meaningless. Simply picking a
number as your best guess, without giving an economic justification is NOT
sufficient. In addition, you must present an interpretation of what these parameters
mean as it relates to your product and why it would make sense for your market.
Once you show a reasonable estimate for “a” and “b”, you must specifically and
clearly show the inverse demand equation. Please do not leave me guessing what
your equation is!
3. This question has three sections.
a. (10 Points) Based on the demand curve you showed in question 2 above, what is
the minimum and maximum price you can charge for your product? This does
not mean that you will, in fact, charge the minimum or maximum price. It simply
gives you an idea of the range of prices your demand curve allows you to charge.
What are the quantities co
esponding to the minimum and maximum price?
Please show your work and explain how you calculated these prices and
quantities. You can then write the answer in this table:
Minimum Maximum
Price $__________ $__________
Quantity ___________ ___________
. (10 Points) Create a table, and in the first column write the range of quantities you
specified above from the minimum to maximum as detailed belwo. Starting from
zero quantity (when you sell nothing), you can increment additional sale for your
product in such a way that your table will not exceed 20 rows and is not less than
5 rows. In the column next this quantity column, calculate the co
esponding
price consumers are willing to pay for each quantity. Finally draw the demand
equation with the quantity on the horizontal axis and price on the vertical axis.
[Hint: I strongly recommend you use Microsoft Excel to create this table and the
graph. I will be happy to help you do this if you wish].
c. (10 Points) Investigate the price-quantity combination at which the point price
elasticity of demand for your product is -1? It is not sufficient to simply report
such a price and quantity from the above table, nor would it be sufficient to plug
in different prices and quantities until you get the answer where the point price
elasticity is -1. You should show an alge
aic derivation and explanation of your
work to indicate how you a
ived at this price and quantity. If this combination
happened to exist in the above table, you should still show mathematical proof of
how
Answered 1 days AfterApr 12, 2022

Solution

Komalavalli answered on Apr 14 2022
13 Votes
Economics 380 course project:
1. The product I have chosen to research is clothing. The clothing market includes all forms of apparel, from athletics to work wear, as well as jewels and luxury products. Following the corona virus pandemic in 2020, when clothes sales decrease, worldwide demand for clothing and footwear is predicted to rise. The worldwide clothing market revenue is anticipated to be over 1.5 trillion USD in 2021, rising to around 2 trillion USD by 2026. The majority of this clothing demand is accounted for by the United States and China, both of which create much more money than any other country. Unsurprisingly, the two countries play a significant role in international commerce. China tops the list of countries with the largest value of clothing exports. This shows there is a supply and demand gap in US. It is a great market to explore and earn.
2. A indicates theoretically maximum set price. If price is set above ‘a’ or above it, demand for clothing is zero. Parameter a includes all factors which is affecting the demand rather than price. Parameter b indicates the slope of the demand curve. P = a-bQ. Since clothing market consists of variety of products; here we will confine into t-shirt. Let us consider on an average people maximum willingness to pay for a quality t shirt is $200.The demand for t shirt is elastic one so the slope will be between 0.1 to 1.Let us fix a =200 and b = 0.5.
Therefore demand equation for tshirt will be P = 200 – 0.5Q
3.
By utilizing the framed demand equation P = 200 – 0.5Q
We will derive maximum and minimum price of the T-shirt
When Q = 0 , P = 200-0.5*0 = 200
Maximum price is $200, Q =0
When P = 0 , 0 = 200-0.5Q
200 = 0.5Q
Q = 200/0.5
Q = $400
Maximum price is $200, Q =0
    
    Minimum
    Maximum
    Price
    0
    200
    Quantity
    200
    0
)
    Q
    P
    0
    200
    1
    199.5
    2
    199
    3
    198.5
    4
    198
    5
    197.5
    6
    197
    7
    196.5
    8
    196
    9
    195.5
    10
    195
    11
    194.5
    12
    194
    13
    193.5
    14
    193
    15
    192.5
    16
    192
    17
    191.5
    18
    191
    19
    190.5
c)
    Q
    P
    Elasticity of price
    0
    200
    1
    1
    199.5
    4
    2
    199
    7
    3
    198.5
    10
    4
    198
    13
    5
    197.5
    16
    6
    197
    19
    7
    196.5
    22
    8
    196
    25
    9
    195.5
    28
    10
    195
    31
    11
    194.5
    34
    12
    194
    37
    13
    193.5
    40
    14
    193
    43
    15
    192.5
    46
    16
    192
    49
    17
    191.5
    52
    18
    191
    55
    19
    190.5
     
Price elasticity of demand = change in quantity / change in price
Let us consider Q = 1 and Q=2
Price P = 200 and P = 199.5
Change in Quantity = 2-1 = 1
Change in price = 199.5 -199 = -0.5
Price elasticity of demand = -0.5
4
    Q
    P
    Elasticity of price
    Marginal revenue
    Total revenue
    0
    200
    1
     
    0
    1
    199.5
    4
    399
    199.5
    2
    199
    7
    397
    398
    3
    198.5
    10
    395
    595.5
    4
    198
    13
    393
    792
    5
    197.5
    16
    391
    987.5
    6
    197
    19
    389
    1182
    7
    196.5
    22
    387
    1375.5
    8
    196
    25
    385
    1568
    9
    195.5
    28
    383
    1759.5
    10
    195
    31
    381
    1950
    11
    194.5
    34
    379
    2139.5
    12
    194
    37
    377
    2328
    13
    193.5
    40
    375
    2515.5
    14
    193
    43
    373
    2702
    15
    192.5
    46
    371
    2887.5
    16
    192
    49
    369
    3072
    17
    191.5
    52
    367
    3255.5
    18
    191
    55
    365
    3438
    19
    190.5
     
    363
    3619.5
.
5.
a)
The price and quantity at which revenue is maximized when Q = 19 and P = 190.5. Maximum...
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