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Project 2 Report
Instructions
Largo Global Inc. is a fictitious firm that will allow you to understand the market forces of supply and demand as they impact a company and the industry in which the company operates. The company produces several product lines: a simple Standard box and a more elaborate Deluxe box. Many other companies also produce these boxes.
In Project 2, you will learn how to apply microeconomics to improve the company's profitability. After reading the instructions in tab one, you will chart the supply and demand curves for the two boxes. In tab two, you will focus on the price elasticity of demand for these two products. In tab 3, you will approximate the prices that maximize the profit for both boxes.
Project 2 is the team assignment in MBA 620. Follow these steps to complete the project:
1. In step 3, the team will complete their Team Agreement and Work Plan and submit it to their faculty member by the due date noted by their faculty member.
1. In step 4, the team will complete this Excel file by answering the questions for all three tabs in the boxes provided. One team member will submit this file to the Project 2 Milestone assignment folder by the stated due date to receive feedback from their faculty member. Upon receipt of the feedback, the team will coordinate any necessary corrections.
2. In step 5, each team member must answer all questions for two of the five topics provided in the
Word file. These questions constitute the core of your team's report. Each team member will serve as the team’s primary respondent for one of the five topics and coordinate the answers. Each team member will also serve as the secondary respondent to one of the five topics and submit their answers to the primary respondent. a. The faculty member will create a separate Team Project 2 Discussion forum for each team, including all five topics. All team members should prepare their answers to the questions for their two chosen topics as separate Word files. They should post their two files on the appropriate issues in the Team Project 2 Discussion forum.
b. After coordinating with the other team members, the primary respondent for each topic will submit their answers to the team’s Word file editor. The editor will then consolidate the answers to the questions for all five topics in a single Word file and submit that file along with the team's revised Excel file to the Project 2 Final assignment folder. c. If the team does not receive a Meets Requirements or Exceeds Requirements grade, the primary respondents will coordinate any necessary changes to the answers for their topic questions and resubmit them to the editor. The editor will then consolidate all changes to the Word file and resubmit the file along with the team's Excel file to the Project 2 Final assignment folder.
Title Page
Name Course and section number Faculty name Submission date
First Revision Changes
(if necessary)
Second Revision Changes
(if necessary)
Supply and Demand
1.
Explain why understanding the law of demand and the law of supply is essential to being an effective manager.
2.
Identify the supply factors that are most important in determining the market equilibrium for the Deluxe box.
3.
Identify the demand factors that are most important in determining the market equilibrium for the Standard box.
Market Structure
1.
Explain why understanding the market structure in which the company operates is vital to being an effective manager.
Comprehending market structure is crucial for assessing a company's economic choices (Dale, 2011). LGI faces monopolistic competition due to the presence of numerous enterprises with diverse product lines. Based on this information, management can make informed decisions regarding product selection,
production methods, output quantities, product pricing, and labor allocation (Greenlaw & Shapiro, 2017). A proficient manager utilizes market structure to comprehend which choices will impact the economic conduct of their industry's rivals. LGI is aware of its significant market influence and hence utilizes it to strategically establish pricing (Dale, 2011). These benefits also contribute to the ease of entry and competitiveness of monopolistic markets. Therefore, LGI must employ umbrella branding and reputation to enhance its market share and gain value (Rasmusen, 2016). Comprehending market structure enables managers to make well-informed judgments, accurately assess competition, identify factors that affect market price, oversee regulations on buying and selling items, and achieve organizational objectives. 2.
Explain the market structure that is most likely operating in the market for the Deluxe boxes.
LGI has made deliberate steps to distinguish their Deluxe boxes from both their own Standard boxes and those of their competitors. The Deluxe boxes, being more expensive, have lower monthly sales volume compared to the Standard boxes. As a result, it is likely that the Deluxe boxes fall under the category of monopolistic competition. Monopolistic competition refers to a market structure where multiple firms sell products that are similar but not identical, and these products have certain unique characteristics (Greenlaw & Shapiro, 2017). Furthermore, as stated by Greenlaw & Shapiro (2017), businesses operating under monopolistic competition exert significant endeavors to rival other varieties,
flavors, and brands. As a monopolistic market, LGI should employ umbrella branding, which involves labeling several items under a single brand name, in order to enhance the profitability of their offers. By
ensuring that the Deluxe boxes are of superior quality, LGI may enhance their reputation and drive sales growth (Rasmusen, 2016). LGI can enhance its ability to uphold superior quality by diversifying its product offerings (Rasmusen, 2016). Given that LGI operates inside a monopolistic rivalry market structure, the quantity of goods and services it produces is governed by the interplay between supply and demand. Companies in the industry have different levels of marketing strength, which makes it harder for them to control the market pricing of equivalent goods and services (Dale, 2011). In the context of monopolistic competition, LGI is required to maintain competitiveness in the presence of several industry competitors, all the while comprehending the demands of its consumer base (Rasmusen,
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