Your initial post should be 75-150 words in length.Recent research confirms that the demand for cigarettes is not only price inelastic, but it also indicates smokers with incomes in the lower half of all incomes respond to a given price increase by reducing their purchases by amounts that are more than four times as large as the purchase reductions made by smokers in the upper half of all incomes. How can the income and substitution effects of a price change help explain this?Review price elasticity of demand and supply. Price elasticity describes the sensitivity between quantity demanded/supplied and price when a change in price occurs. A relatively lower change in quantity versus a change in price means the product is more price inelastic; a higher relative change in quantity versus a price change indicates more price elastic. Review the substitution effect and income effect dynamics.

Assignment OverviewBefore beginning this assignment, make sure you have gone carefully through all of the required readings for this module. It is very important to carefully absorb the general concepts as well as the numerical examples in the background readings. For this assignment, you will have to answer some purely conceptual questions, as well as some numerical problems. For conceptual questions, make sure to thoroughly explain your answers and to cite specific readings from the required background materials to explain your answers. For numerical problems, make sure to show all of your work and explain how you arrived at your answers (partial credit can be given if you get the final answer wrong but do some of the steps correctly).Case AssignmentPart A: Conceptual questionsSuppose you own a pet shop. Your sales are decent but a marketing consultant tells you that you could increase your sales and be able to charge a higher price if you spend some money on local television ads. If the consultant is right, will advertising lead to an increase in quantity demanded? Or a shift in the demand curve? Both? Neither? Explain your answer and make sure to cite at least one of the required readings in your answer.You are the owner of a furniture factory. You normally produce 100 pieces of furniture a day because that is how much you can produce given the amount of qualified workers in your town and the amount of reasonably priced wood that you can purchase locally. Then one day you get an order from a large national retail chain who wants to purchase 200 pieces of furniture a day from you. You are hesitant, as you will have to pay higher wages to get some qualified workers to move to your town. You also will need to pay higher prices for wood because you will no longer be able to rely solely on local suppliers and will have to spend more on shipping wood from other towns. But you drive a hard bargain and the retail chain agrees to pay one and a half times your normal price. Does this situation describe a change in quantity supplied? A shift in the supply curve? Both? Neither? Explain your answer and make sure to cite at least one of the required readings in your answer.Suppose marijuana has just been legalized in your state. Nobody in your home town wants to start a marijuana business, as this would be too much of a stigma. But being an MBA student, you know a good business opportunity when you see one and decide to take a stab. Shortly after starting up your business, you gain a loyal following of customers and start raking in some steep profits. However, the local government decides that they want a cut of your profits and starts charging a 20% sales tax on marijuana. Do you think this would lead to a 20% or greater loss in sales? Do you think marijuana in this situation would be facing inelastic or elastic demand? Explain your reasoning, and make sure to cite at least one of the required readings regarding elasticity.Part B Quantitative ProblemSuppose the demand function for a new smartphone can be expressed as QD = 1000 – 1.5P with QD being quantity demanded and P being price. The supply function can be expressed as QS = 50 + 2PFill out the following table using the above equations:PriceQuantity DemandedQuantity SuppliedSurplus Amount or Shortage Amount200220240260280300320340Now answer the following questions:What is the equilibrium price? You can compute this either using Microsoft Excel, or by using algebra from the equations above and solving for a price where quantity supplied equals quantity demanded. Show your work by either showing the algebra steps or by showing how you used Excel to calculate.Suppose the supply function changes to 100 + 2P. What is the new equilibrium? Show your work by either showing the algebra steps or by showing how you used Excel to calculateAssignment ExpectationsAnswer the assignment questions directly.Stay focused on the precise assignment questions. Do not go off on tangents or devote a lot of space to summarizing general background materials.For computational problems, make sure to show your work and explain your steps.For short answer/short essay questions, make sure to reference your sources of information with both a bibliography and in-text citations. See the Student Guide to Writing a High-Quality Academic Paper, including pages 11-14 on in-text citations. Another resource is the “Writing Style Guide,” which is found under “My Resources” in the TLC Portal.Required ReadingFor a simple introduction to the concepts of supply and demand, take a look at these animated videos from Professors Alex Tabarrok and Tyler Cowen of George Mason University. These videos will give you the basics of both the demand and supply curves:Tabarrok, A. & Cowen, T. [Marginal Revolution University]. (2015, January 2). The demand curve [Video file]. Retrieved from https://www.youtube.com/watch?v=kUPm2tMCbGETabarrok, A. & Cowen, T. [Marginal Revolution University]. (2015, January 2). The supply curve [Video file]. Retrieved from https://www.youtube.com/watch?v=nKvrbOq1OfINow, go slightly deeper into these topics and read Chapters 3 and 5 from the Taylor (2014) below. These chapters provide a detailed introduction into demand, supply, and elasticity. Pay special attention to the “Self-Check Questions” at the end of each section, which include the solutions. Before submitting the Case Assignment, it is best to test your knowledge of the concepts with the practice questions.Taylor, T. (2014) Principles of Microeconomics. OpenStax College. http://cnx.org/contents /6i8iXmBj@10.174:UfIHC0qu@6/Introduction-to-Demand-and-SupThe quantitative problems in the Case for this module require you to work with demand equations. To better understand this concept, please read through Section 3.4, Modeling Consumer Demand, in the following book:Stengel, D. (2012). Managerial Economics Principles. Flat World Education. http://saylordotorg.github.io/text_principles-of-managerial-economics/

Written Assignment Degree ApplicationFor each written application in this course, you must follow the following assumptions:You are a director of a department that is focused on your particular degree of study. For example: Director of Project Management, Director of Healthcare Administration, Director of Hospitality, or Director of Human Resources. If you are a general BSOM student, then assume you are a department General Manager.Develop your paper with applications based upon these position assumptionsWritten Assignment Specifics for This ModuleUnderstanding and using financial ratios is a key method by which analysts determine company value and long-term sustainability. Select a publicly traded company of your choosing. Use their annual report or other information to:Share some of the financial ratios you have foundShare some of the trends you seeProvide a recommendation on the health of that companyIs it important for department managers across the company to understand some of these ratios? Why or Why Not?Written Work RequirementsAll graded assignments must be typewritten, as designated by the professor of record for the course.All referenced materials must be presented according to the Publication Manual of the American Psychological Association (APA) based upon the most current published edition. (current, 7th edition).All required written assignments are due on the last night of each lesson week at 11:59pm EST. This information is included into the course scheduler and calendar of every course.All written and graded assignments are considered the property of the College of Adult and Professional Studies and should be returned to the appropriate professor of record for the related course.