500 words 10 hrs

Market Analysis Assignments

The goal of the assignments is for you to apply economic concepts and theories by connecting course content to a good/service or the industry that produces the good or service. All assignments are listed under Market Analysis Assignments on Canvas. You must complete the first assignment in order to be graded on assignments 2-5 below. The first four assignments are due by 11:59pm EST Wednesday during the week in which they are due, with a 10% deduction from the grade for every day the assignment is submitted late. The fifth and final assignment is due by 11:59pm EST on the Monday of Finals Week, with no late assignments accepted.

For each essay, if you do any research at all, be sure to properly cite your sources and include a works cited or bibliography at the end of the essay, using whichever style is most common for your field of study. None of the essays should contain quotes from other sources. Your essays should be written in your own words: thus, you may paraphrase your sources if you properly cite them.

1. Good/Service and Industry Choice (4 points)

In the Good/Service and Industry Choice Assignment on CANVAS, there is a link to a Google document. This document contains a list of goods/services and the industry in which they are produced and sold. Throughout the semester, you will be applying the economic concepts and theories that we learn to the market for the good/service or industry chosen.

To make your choice, follow these directions:

Step one: Click the link in the assignment, which opens a Google document listing the goods/services and their associated industries. Note: You must log in to Google with your Penn state account to gain access to the document. I will not be granting access to private email accounts. If you have any issues with logging into Google with your PSU web access account, contact Penn State technology support https://it.psu.edu/get-support.

Step two: Click "Open with Google Sheets" and add your name in column C for the good/service and associated industry that you would like to study for your Market Analysis Assignments throughout this semester, with only one student for each. The choice is on a first come, first serve basis. 

Step two: After you have placed your name next to a good/service with its industry on the google document, type your good/service choice in the submission box of this assignment and click submit.

2. Article Analysis: Demand-Supply-Market Equilibrium (38 points)

This is a one- to two-page essay where you will apply the demand/supply model to a current event that is occurring or recently occurred in the market for the good/service that you chose to study this semester. To receive credit, you MUST base this essay on your chosen good or service from the first Market Analysis assignment above.

To write the essay, you will find one newspaper article that discusses a current event (published from June 2020-present) that is impacting the market for your selected good or service. The article must be from a credibly written conveyor of news. You can use an article that is found through any search engine by clicking the “News” tab, or by completing an Advanced Search on Penn State’s Online Library (https://libraries.psu.edu/) by clicking “Newspaper Article” in the Content Type. The article must discuss a change in demand or supply on the market for the good or service you are studying. You must include a complete citation, with an active link, of the newspaper article at the end of your essay. (Citation formatting guides can be found here: https://guides.libraries.psu.edu/CitationStyles. You may choose the citation style that is commonly used in your own field of study.) Follow the directions below to write an essay analyzing how the current event in the article is impacting the market.

First, identify only one determinant that is having the greatest impact on the demand or supply. For the identified determinant, write, in your own words, a sentence or two explaining how the determinant is impacting the demand or supply. Is demand or supply increasing or decreasing?

Next, draw the demand-supply market model graph to analysis the changes to the market from the determinant identified above. Either draw the graph on the computer or use a hand-drawn graph. If using a hand drawn graph, take a picture of it and upload it to this assignment. Be sure to properly label your graph, which includes labeling the axes, curves, both equilibrium points, and the shortage or surplus.

Finally, in addition to the graphical illustration of the change occurring in your market, provide a verbal interpretation of what is happening on the graph by answering the following questions. Be sure to explain everything using the labels that you used on your graph for each curve, original and new market equilibrium points, and the shortage or surplus.

· Is there a rightward or leftward shift of the demand and/or supply curve?

· Explain the shortage or surplus that is caused by the current event.

· What will happen to the market equilibrium? That is, will the price need to rise or fall AND will the quantity need to increase or decrease to achieve the new market equilibrium?

· Will there be a movement along the demand and/or supply curve to achieve the new market equilibrium? Explain how and why.

3. Price Elasticity (22 points)

This is three-paragraph essay applying what you learn about price elasticity to your chosen good or service. To receive credit, you MUST base this essay on your chosen good or service from the first Market Analysis assignment above.

You are not expected to find the numerical measurement of elasticity. Instead, you should be using your knowledge of the determinants of price elasticity to provide a convincing economic argument for the responsiveness of both the consumers and producers of the good/service you are studying. Note: Though not required, you may perform research for this essay; and if so, properly cite your sources and include a bibliography.

1. Price elasticity of demand

Is the price elasticity of demand for your good/service more likely to be relatively inelastic, relatively elastic, highly inelastic, or highly elastic? Explain why by providing a complete economic explanation using the determinants of the price elasticity of demand for why consumers have this type of responsiveness to a price change.

2. Price elasticity of supply

Is the short run price elasticity of supply for your good/service more likely to be relatively inelastic, relatively elastic, highly inelastic, or highly elastic? Explain why by providing a complete economic explanation using the determinants of the price elasticity of supply for why producers have this type of responsiveness to a price change.

3. Elasticity impact on market equilibrium and total revenue

Given the price elasticity of demand for your good or service (as answered in paragraph one of this essay), explain how the equilibrium price and quantity are impact when there is a change in supply. That is: When supply shifts, will market equilibrium quantity change more significantly than market equilibrium price, or vice versa?

Finally, given the price elasticity of demand for your good or service (as answered in paragraph one of this essay), fully explain how the total revenue of a firm is impacted when there is a change in price.

4. Industry Concentration (14 points)

This is a short, two-paragraph essay, which reports and interprets the following statistics for your industry: number of firms, the concentration ratios, and, when given, the Herfindahl Index (HI), also commonly known as the Herfindahl Hirschman Index (HHI). To receive credit, you MUST base this essay on your chosen industry from the first Market Analysis assignment above.

First, you will find the statistics using the following US Census data table: Concentration Ratios.

· On the left, click Filter.

· Type or paste your industry into the FIND A FILTER search bar.

· Click the box to the left of your industry, which appears under the search bar. When multiple industries are returned, choose the industry with the 6-digit NAICS code.

· Click on the table with the most recent year that is returned in the left column.

· Record the number of firms, the concentration ratios (given in either the column labeled “Percent of total value of shipments”, “Revenue of largest firms as a percent of total revenue”, or “Sales, value of shipments, or revenue of largest firms as percent of total sales, value of shipments, or revenue”), and the HHI (when provided).

Note: When this assignment opens, I will go over these steps to collect the statistics in class. Part of the rubric will include that you are able to collect the statistics for your industry on your own.

Next, you will report and interpret the statistics in a two-paragraph essay using the following guidelines.

Paragraph one:

· Identify the number of firms in the industry, the 4-, 8-, 20- and 50- firm concentration ratios and, when possible, the HHI.

· Interpret the 4- and 8- firm concentration ratios to begin to develop an economic analysis of the competitiveness of your industry (which you will continue to work on in the next assignment - Market Structure Essay). That is, explain how much of the total industry sales are accounted for by the 4 and 8 largest firms in the industry.

Paragraph two:

· Compare the concentration ratios with the benchmarks (from class) for the level of concentration in an industry and explain whether the industry is competitive or concentrated. If there is any concentration in the industry, identify the number of firms when concentration begins.

· When possible, compare the HHI with the benchmarks (from class) for the level of competitiveness of an industry and identify whether your industry is highly competitive, moderately competitive, or uncompetitive.

· Finally, using the concentration ratios, HHI, and the number of firms reported in the industry, identify the levels of concentration and competitiveness of the overall industry. That is, is your industry highly competitive with little to no concentration, highly concentrated with little to no competition, or somewhere in between?

5. Market Structure (52 points)

This is a research essay (no more than two-pages) identifying the market structure of the industry you are studying as either pure competition, pure monopoly, monopolistic competition, or oligopoly. Through research, you will make a compelling, economic argument for why you identified the specific type of market structure for your industry. To receive credit, you MUST base this essay on your chosen industry from the first Market Analysis assignment above.

The introduction should be a quick summary of the concentration ratios from the last assignment and then identifying the market structure. The body of the essay should develop a compelling economic argument by answering the following questions to support the market structure.

· What are examples of firms producing the goods or services you are studying? Identify at least two of the top firms in the industry. Are there dominate firms in the market?

· Do the firms in this market produce and sell a homogenous or differentiated good? How does this impact how competitive firms are? Does this impact how firms compete on quality and innovation?

· Are there other industries that produce goods or services that can be substitutes for your industry’s goods or services? How does this impact the level of competitiveness for the firms in the industry you are studying?

· How do firms in the industry choose quantity and price? Are firms interdependent? Note that the model that the firms follow will be based on their market structure.

· Do firms compete through marketing and advertising? How and why?

· What are at least two of the highest barriers to enter this industry? How do the barriers impact the market structure?

In the conclusion, given your research and the HHI of the industry, identify the overall level of competitiveness of the industry and include a summary of the presented economic arguments that support this level of competition in your industry. Remember, regardless of the industry’s market structure, firms within the industry may or may not be highly competitive. That is, in an oligopoly, firms may compete fiercely; or, in monopolistic competition, firms in the established industry may not be very competitive with each other (but may continue to innovate and attempt to keep new competition from entering).

You must use at least three credible sources (other than your original newspaper article from the article analysis essay) and cite them correctly throughout your essay to support your claims for the market structure. Include a works cited (or bibliography) section at the end of your essay. Citation formatting guides can be found here: https://guides.libraries.psu.edu/CitationStyles.