Market Equilibrium

With our understanding of demand and supply, we can now show how the decisions of buyers of corn interact with the decisions of sellers to determine the equilibrium price and quantity of corn. In the table in Figure 3.6 , columns 1 and 2 repeat the market supply of corn (from the table in Figure 3.5 ), and columns 2 and 3 repeat the market demand for corn (from the table in Figure 3.3 ). We assume this is a competitive market so that neither buyers nor sellers can set the price. Equilibrium Price and Quantity We are looking for the equilibrium price and equilibrium quantity. The equilibrium price (or marketclearing price ) is the price where the intentions of buyers and sellers match. It is the price where quantity demanded equals quantity supplied. The table in Figure 3.6 reveals that at $3, and only at that price , the number of bushels of corn that sellers wish to sell (7000) is identical to the number consumers want to buy (also 7000). At $3 and 7000 bushels of corn, there is neither a shortage nor a surplus of corn. So 7000 bushels of corn is the equilibrium quantity : the quantity demanded and quantity supplied at the equilibrium price in a competitive market. Graphically, the equilibrium price is indicated by the intersection of the supply curve and the demand curve in Figure 3.6 (Key Graph). (The horizontal axis now measures both quantity demanded and quantity supplied.) With neither a shortage nor a surplus at $3, the market is in equilibrium, meaning “in balance” or “at rest.” Competition among buyers and among sellers drives the price to the equilibrium price; once there, it remains unless it is subsequently disturbed by changes in demand or supply (shifts of the curves). To better understand the uniqueness of the equilibrium price, let’s consider other prices. At any above-equilibrium price, quantity supplied exceeds quantity demanded. For example, at the $4 price, sellers will offer 10,000 bushels of corn, but buyers will purchase only 4000. The $4 price encourages sellers to offer lots of corn but discourages many consumers from buying it. The result is a surplus (or excess supply ) of 6000 bushels. If corn sellers produced them all, they would find themselves with 6000 unsold bushels of corn. Surpluses drive prices down. Even if the $4 price existed temporarily, it could not persist. The large surplus would prompt competing sellers to lower the price to encourage buyers to take the surplus off their hands. As the price fell, the incentive to produce corn would decline and the incentive for consumers to buy corn would increase. As shown in Figure 3.6 , the market would move to its equilibrium at $3. Any price below the $3 equilibrium price would create a shortage; quantity demanded would exceed quantity supplied. Consider a $2 price, for example. We see both from column 2 of the table and from the demand curve in Figure 3.6 that quantity demanded exceeds quantity supplied at that price. The result is a shortage (or excess demand ) of 7000 bushels of corn. The $2 price discourages sellers from devoting resources to corn and encourages consumers to desire more bushels than are available. The $2 price cannot persist as the equilibrium price. Many consumers who want to buy corn at this price will not obtain it. They will express a willingness to pay more than $2 to get corn. Competition among these buyers will drive up the price, eventually to the $3 equilibrium level. Unless disrupted by changes of supply or demand, this $3 price of corn will continue to prevail.

References

McConnell, C. R., Brue, S.L., & Flynn, S.M. (2009). Economics: Principles, problems, and policies (18th ed.). New York: McGraw Hill/Irwin.

ECO 561 – Week 1 Instructors Syllabus

Increasing Revenue

 

 

 

• 1.1 Choose methods to increase revenue in an organization.

   

  ·         1.2 Explain market equilibrating process.

   

   

   

  Course Assignments

   

   

   

  1.       Readings

   

   

   

  ·         Read Ch. 1–3 & 6 of Economics.

   

   

   

  2.       Individual Assignment: MBA Exam Questions

   

   

   

  ·         Resources: MBA Web Prep link on the student Web site

   

  ·         Complete Ch. 1 & 2 Lecture Exam Questions at the MBA Web Prep for Economics site.

   

  ·         Submit the results to your faculty member.

   

   

   

  3.       Individual Assignment: Market Equilibrating Process Paper

   

   

   

  ·         Write a 350- to 500-word paper in which you relate the concepts in this week’s readings to a prior real world experience. The experience does not necessarily have to be work experience.

   

  ·         Discuss the market equilibrating process in relation to your experience.

   

  ·         Format your paper according to APA standards

   

   

   

   

   

   

   

   

   

   

   

ECO 561 – Week 1 Assignment

 

Individual Assignment: Market Equilibrating Process Paper

 

Write a 350- to 500- word paper in which you relate the concepts in this week’s readings to a prior real world experience. The experience does not necessarily have to be work experience.

Discuss the market equilibrating process in relation to your experience.

Format your paper according to APA guidelines.

 

Individual Assignment: Exam Questions

 

Please see your instructor’s syllabus for this week’s assignments

Complete Chapters 1 & 2 Lecture Exam Questions at the MBA Web Prep for Economics site.

Submit the results to your faculty member.

Halfway Point

We are officially halfway to completing our Masters of Business Administration program! Congratulations to everyone on our team that has stuck with it. Only nine more months to go…

 

http://www.despair.com/vision.html

 

I had a bit of a hard time deciding the right demotivational poster to mark the occasion.

 

QNT 561 – Week 6 Syllabus

Week 6 Assignments

Final Project

 

For Workshop Six, each Learning Team (or directed study student) will prepare a 2,100-2,800-word final paper and Microsoftâ PowerPointâ Presentation that demonstrates understanding of the use of statistical methods in the business decision-making process.

The topic of the paper should be representative of the business-related problems that typically require the use of sampled data and appropriate test statistics to aid in the decision making process. The problem may be related to any business area of interest to the team; however, the team should not choose a topic, which cannot be completed within the six-week time span of this course. The topic does not have to be complex, but it must be quantitative, original and include:

1. Title Page.
2. Statement of the Problem. Identify, define, and describe an organizational or business-related problem that can be analyzed using statistical methods. The problem statement must express a loss of profit, market share, customers, quality or increased costs.
3. The Research Question. One sentence question addressing the issues, variables and the problem.
4. Purpose of the Study. Why is this study being conducted? Who is requesting it?
5. Background. Review of related literature. Provide background information and prior research on the nature of the problem.
6. Variable Definitions. Define the variables quantitative or qualitative (dependent and independent), which are of interest in the situation chosen for the paper.
7. Level of Measurement. Define the level of measurement applied to the variables (quantitative/qualitative, discrete/continuous nominal, ordinal, interval, or ratio).
8. Hypothesis. Define the null and alternative hypotheses.
9. Alpha Level of Significance. Determine the alpha level and explain why.

10.  Research Design. Describe the plan of the research.  This can be individual respondents to a questionnaire, quasi-experimental, or recorded observations.  In addition, describe the sampling method chosen to collect the data for analysis.

11. Data Collection. Describe the procedures used to collect data.  For example, if the number of patient days is the dependent variable, explain how patient days are calculated. The data must be primary data, in other words the data must be observed and recorded by the researcher. Secondary, pre-existing data gathered and recorded by sources other than the researcher is unacceptable for this research project.

12. Limitations. State the limitations of the study. (Sample size, location, time, weather, number of observers, etc.)

13. Statistical Methods. Descriptive Statistics. Discuss the methods (tests) used to analyze the variables and test the null hypothesis.  Include a brief discussion of why the specific methods were chosen, and define any assumptions.

14. Results and Recommendations. Summarize the results of testing the null hypothesis, and clearly state whether or not the null hypothesis was rejected or why you failed to reject it (retain) and the p-value. Determine the conclusions that were derived from this study. Make any recommendations or observations you feel are appropriate based on the results obtained. One possible outcome may be that it is inconclusive. This is an acceptable outcome for this project. However, should that be the case, the team should suggest potential future research efforts that might provide more definitive results.

15.  References. List all references for the study.

Presentation:

Create a 10-15 slide Microsoft PowerPoint presentation that gives an overview of the team project to include all of the fifteen items above. Dress for success.

QNT 561 – Week 4 Syllabus

Week 4 Assignments

 

• Perform Two Way Analysis of Variance With Out Replication..
• Construct effective questionnaires and surveys.

 

 I4 Individual Assignment Grape Fields Two Factor Anova With Out Replication: The following three grape fields were analyzed for pest treatment as measured by grape tonnage.

 

A                     B                     C

            TREATMENT 1         70                    90                    120

            TREATMENT 2         110                  120                  140

            TREATMENT 3         130                  110                  80

     

1. Construct the research problem, question and purpose. Construct the null and alternative hypothesis. Use an alpha level of significance of .05.
2. Do NOT do Descriptive Statistics. Megastat will not do this on a small data set. Run a MegaStat Analysis of Variance, Randomized Blocks Anova, this is an Anova without replication. Explain the possible differences. Conclude and make recommendations.

 

G4 Learning Team Assignment: Develop a new research problem, question and purpose. Design a 10 question survey to address the research question.

QNT 561 – Week 3 I3 Raw Data

Z Test : Dan’s Sport & Grill
Dan, the manager and owner of Dan’s Sport & Grill wants to know if there is a difference in sales of pints of two brands of ale:
Sierra Nevada Pale Ale & Red Tail Ale over the course of 31 days.
Ho: μ1 = μ2 H1: μ1 ≠ μ2 α = .05
Day	Day Count	Sierra Nevada	Red Tail
S	1	122	88
S	2	135	75
M	3	142	134
T	4	98	100
W	5	66	44
TH	6	89	112
F	7	116	99
S	8	138	142
S	9	110	118
M	10	155	125
T	11	58	26
W	12	72	20
TH	13	92	110
F	14	128	84
S	15	175	199
S	16	121	111
M	17	154	166
T	18	45	40
W	19	74	68
TH	20	80	92
F	21	110	112
S	22	189	179
S	23	112	122
M	24	149	100
T	25	50	33
W	26	77	69
TH	27	100	88
F	28	140	159
S	29	189	188
S	30	99	100
M	31	166	135

QNT 561 – Week 3 Syllabus

Apply concepts of probability to business decisions. Conduct one-sample and paired sample tests of hypothesis.

 

Individual Assignment

 Hypothesis Test – Compare two independent groups – Select Z Test

 Dan’s Sport and Grill – Sports Bar scenario

 Sales of bottles of beer

 

	X1 – Sierra Nevada Pale	X2 – Red Tail
1
2
…
31

 

Data to be provided by the instructor.

Construct the research problem, question and purpose. Construct the null and alternative hypothesis. Use an alpha level of significance of .05.

Do Descriptive Statistics on this data and describe the data in a write-up. Run Mega Stat

 

G3 Learning Team T-Test Paired Observations Furniture Store:

A Sacramento furniture store designed an incentive plan for their sales force. The following data lists weekly income before and after the plan. Is the plan effective?

1. Construct the research problem, question and purpose. Construct the null and alternative hypothesis. Use an alpha level of significance of .05.
2. Do Descriptive Statistics on this data and describe the data in a write-up. Run Mega Stat Hypothesis Test: Paired observations. Explain the possible differences. Conclude and make recommendations.

 

Salesperson                  Before              After

A                                 320                 340

B                                 290                 285

C                                 421                 475

D                                 510                 510

E                                 402                 500

F                                  625                 631

G                                 360                 365

H                                 505                 619

QNT 561 – Week 2 Syllabus

Research and Sampling Designs

 

• Formulate effective research questions.
• Construct a research design for given research questions.
• Apply the central limit theorem to sample means.
• Construct confidence intervals for a mean.

 

Assignments

 

I2 Individual Assignment – Construct a research problem, question and purpose. Construct the null and alternative hypothesis. Select an alpha level of significance.

Identify a sample design to use for collecting the data.

 

G2 Learning Team: Problem Sets – Descriptive Statistics and Probability Distributions Z-Scores problems developed in class.

QNT 561 – Week 1 Syllabus

Week 1 Assignments

Descriptive Statistics and Probability Distributions

 

• Compute descriptive statistics for given data sets.

Apply probability concepts related to discrete and continuous probability distributions.

Install the Microsoft^® Excel Add-in MegaStat^® to help in your statistical calculations for this course. The MegaStat^® Web link is located on your rEsource page. Click the link and follow the directions for installation.

Assignments

I1 Individual Assignment – Obtain sample data (n<=50) from your work, the text or the internet. Explain what the data measures and run Megastats Descriptive Statistics. Do an in-depth descriptive statistics write-up of this data. Explain all items checked and offer insights as to possible meanings.

 

G1 Learning Team – Develop several research problems & questions for the final research paper and presentation. The instructor must approve the proposal.

Form Learning Teams. These teams will work together throughout the course.

Learning Team - Review the objectives from Week One, and discuss additional insights and questions that may have arisen.

Learning Team - Learning Teams prepare the Learning Team Log before the next class meeting.