Consider how individual firms make decisions. What factors guide firms in their decision-making process? As you do so, address three of the following (and only three) assigned concepts in conjunction an assigned question:
Concept: Invisible Hand Principle
Question: What role does the invisible hand play in a firm’s decision-making process – both in regard to the firm’s own self-interest and also in regard to the market’s natural tendency toward equilibrium (the point at which the quantity demanded equals the quantity supplied)?
Concept: Price Elasticity of Demand
Question: How does the nature of demand for a firm’s service or product affect its decision-making process?
Concept: Profit – Accounting versus Economic
Question: What information is conveyed by economic profit as opposed to accounting profit? Which measure of profit is most useful to a firm’s decision-making process? Why?
Concept: Price Takers versus Price Searchers
Question: What is the difference between firms that are price takers and those that are price searchers?
The key to the assignment is to demonstrate your knowledge of three of the assigned concepts. Assignments should be clearly organized, succinct, informative, coherent, and thoroughly based upon an analysis of the assigned concepts. Always keep in mind that the key to the assignment is to demonstrate your mastery of the three assigned concepts you select, the topic question(s) are included only to place your analysis of the assigned concepts into context. Don’t become overly concerned with the topic to the detriment of a detailed discussion of the assigned concepts.
Assignment Format
Section 1
Include a brief introductory paragraph comprised of a statement of purpose for your assignment – what are you going to do and how are you going to do it.
Sections 2 through 4
Here you will have a one to two paragraph section for each of the 3 assigned concepts you select. With each of your three assigned concept sections begin by first fully defining and explaining the assigned concept in your own words, only then move to apply the assigned concept in the context of the connected topic question.
Section 5
This should be a brief concluding paragraph to summarize the key elements articulated in your assignment.
Section 6 (References Section)
While you should define and explain your three selected assigned concepts in your own words, you should be prepared to supplement your understanding of the topic questions with research. Be sure to cite any resources used in this section. You may use whatever reference format you desire (MLA, APA, etc.), but when you cite a website, be sure to include the full and specific URL with your reference.
Length and Font
Answers should range between 1,500 and 2,000 words in total for the assignment. The assignment should be single-spaced, in Calibri 11pt font.
