Given a demand function and a supply function, examine how the price mechanism reconciles changes to either/both function(s), resulting in a new market equilibrium price and level of output.
- Explain why the difference between the similar-sounding terms,quantity demanded, and demand, is so critical to understanding the model of supply and demand.
- Determine changes in the equilibrium price and equilibrium quantity when shifts in demand and supply occur.
TCO G: Given product marketing data that includes price elasticity coefficients, demonstrate how to set product pricing to maximize profits.
- Explain what choice a business owner should make in setting the price for a good or service in the case of elastic demand as well as inelastic demand.
- Determine the correct value for elasticity of demand using the midpoint formula for elasticity of demand.
- Analyze a set of demand curve data and be able to calculate marginal revenue.
- Areas that were discussed in the Discussion areaswill be prime targets.
- Assignments will also be prime targets for revisiting.
- Reviewing the TCOs, which are listed below for your convenience, will also be a great preparation for the Test.
|A||Given a demand function and a supply function, examine how the price mechanism reconciles changes to either/both function(s), resulting in a new market equilibrium price and level of output.|
|B||Given product marketing data that includes price elasticity coefficients, demonstrate how to set product pricing to maximize profits.|
|C||Given sample cost and marginal revenue data, use marginal analysis to calculate shutdown, break-even, optimal output, and optimal resource input(s) to utilize.|
|D||Given sample price and cost data, along with antitrust parameters, compare and contrast optimal output levels for a competitive firm versus a firm operating in an imperfectly competitive environment.|
|E||Given sample macroeconomic data, derive unemployment and real and nominal inflation rates, assessing the sensitivity of market and firm strategic policy decisions to the quality of statistical data underlying these indicators.|
|F||Given GDP, budget deficit (surplus), and trade deficit (surplus) data, illustrate or calculate the impact on each changes in fiscal policy (government spending, taxation) and/or monetary policy (interest rates, open market operations).|
|G||Given historical exchange rates, import/export volumes, and regulatory relations between two nations, analyze the role of trade barriers and institutional entities (e.g., GATT, NAFTA, and EU) on the global demand for and supply of commodities and currencies.|
|H||Given a new forecast of macroeconomic variables and an existing firm’s performance goals, predict any impact(s) of the macroeconomic forecast on the firm’s key microeconomic variables (e.g., demand behavioral responses, supply alternatives, strategic direction, raw material and/or human resource allocations, etc.).|