Select a new, realistic good or service for an existing industry. Develop apaper based on that new good or service. This must be something new, or something that is new to a firm.
The first paragraph of the paper must state what the proposal is, what the key points of the proposal are, and how you will develop the proposal itself within the body of the paper. The final paragraph must be a conclusion section that restates the key themes of your proposal, and most importantly, reinforces your case for why the proposal should be adopted.
Write the economic analysis section of a business proposal – here you are applying the course concepts as they relate to the item you propose in the first paragraph of the proposal document. This will include statements about the market structure and the elasticity of demand for the good or service, based on text book principles. You need to create hypothetical data, based on similar real world products to estimate fixed and variable costs.
Cite the text, preferably in every paragraph of the proposal.
Identify market structure
Identify elasticity of the product
Include rationale for the following questions:
How will pricing relate to elasticity of your product?
How will changes in the quantity supplied as a result of your pricing decisions affect marginal cost and marginal revenue?
Besides your pricing decisions, what are your suggested nonpricing strategies? What nonpricing strategies will you use to increase barriers to entry?
How could changes in your business operations alter the mix of fixed and variable costs in line with your strategy?
No more than 1400 words