Walmart Strawberry Yogurt Demand Shifters Analysis The Primary goal of the term project was for students to gain comfort in using statistical software pack

Walmart Strawberry Yogurt Demand Shifters Analysis The Primary goal of the term project was for students to gain comfort in using statistical software packages to conduct an empirical analysis of a particular firm. The general goal for this project was to assess how certain risk factors that are well-known within the Finance community impact the stock price of a particular firm.

The Primary goal of this final exam project is complementary to the term project. It is to conduct an economic analysis of the same firm as your term project. The general goal here will be to assess how certain risk factors affect the market for a particular product produced by your firm.

Using Walmart Company please pick a product that wall mart has and and label this as your primary product. If your company produces multiple products, please select one and denote this as your primary product for the duration of your final exam project. Please provide explanations for answers to all questions and include a reference list at the end of your project to include all sources that you used to aid you in coming to your answers. Please do not worry about the format of the citation list, but please just be consistent.

Please make sure to submit your own work and to put everything in your own words. Again, it is okay to talk to other people, but you must demonstrate full mastery over material to get full credit. Finally, you will turn in the project via blackboard and it will check for plagiarism, so, again, please put make sure to put all answers in your own words. Thank you.

In addition to other factors, you will be evaluated based upon uniqueness in your answers and selection of primary product as much as the selection of the company since I know many of you have picked the same company due to the brevity in duration of our face-to-face conversations. The reason for this is to do our best to continue to maintain the integrity of the assignment in continuation of the discussion given above.

Assignment questions

(Please remember to justify clearly all your conclusions and label all graphs)

I would like to begin the content portion of this project by providing more background on its motivation. The term project focused on the stock price and as we mentioned during week #1, a closely related often-cited goal in business is profit maximization. Therefore, the goal of our semester has been to manage the following equation:

= −

As we discussed in class, total revenues are typically assumed to come from demand and so question #1 is all about demand and shifters of demand.

1. Demand analysis

Px= 9-12X3Qdx. This equation completes the specification for the demand equation for your primary product. So, if your company was Sherwin Williams and you pick yellow paint, this equation would specify the demand for yellow paint.

Please determine the three most important demand shifters for the market for your primary product. So, if your product is yellow paint and your company is Sherwin Williams, your answer to this question will focus on the market for yellow paint, generally, and not just the paint produced and manufactured by Sherwin Williams. Please use graphs of the demand equation that you constructed above to demonstrate how the shifters you have chosen impact the demand for goods bought and sold in your primary market. Again, in the context of the above example, these graphs would correspond to the graphs for yellow paint.

2. Cost analysis

Px= 8+Qdx. The second term in the above equation is total cost. The lecture on cost was all about Q (short for Quantity), since total revenue=Price*Quantity. This lecture focused on where Q came from because we need to produce Q in order to supply it to the market and subsequently sell it in the market. A key assumption about cost, then, is that it corresponds to manufacturing cost, i.e., the cost we incur to sell our product in the marketplace. So, in the context of the above example, this would be the cost to manufacture (i.e. make) yellow paint. In other words, we need to make our product in order to sell it and so the lecture on production taught us how to produce our product and the lecture on demand and supply taught us how to represent the corresponding supply equation.

What are the three most important shifters for the supply of your product? Please now assume that costs of production and supply are related and recall from our lectures in class that the two factors that drive production for any firm are labor and capital. How is the production of your product impacted by the shifts in the supply of your product? (Hint: if our product is yellow paint and after doing our research we find that technology is an important shifter in the supply of yellow paint. Then, in addition to discussing how technology affects the supply of yellow paint, we want to explain how technology affects the production of yellow paint and in particular, does it affect labor, capital, both? If it affects neither, but it does affect cost, then please state it. In all cases, please make sure to explain your position and use graphs to support your position).

The slides also describe economies of scale, scope, and cost complementarities as additional tools to represent costs. Does your firm exploit any of these in order to reduce its costs? If so how and if not why not? (Please use graphs to support your answer).

Finally, bringing everything together, of the market structures described during our last two virtual lectures, in which, if any, do you operate your business? Do you have market power, why or why not? If so, how do you exploit it?

3. Corona Virus effects

In a recent Wall street journal article from February 27, 2020 titled “The Fed can’t wait to respond to the coronavirus”, the author stated, “Today, the novel Coronavirus is a material risk to the economy. It represents an unexpected shock…” Inevitably, in our lifetimes, we may run into such shocks again and we, as business managers and family members, should help other people within our business and our family.

Assuming the CoronaVirus is tantamount to a risk factor to the economy, how does the shock of the CoronaVirus affect your primary market? (Please be sure to consider systemwide/market shocks, industry specific, and firm specific shocks in your response. For these types of shocks, additional helpful considerations include the fixed costs and the variable costs you may face. How are these costs affected by CoronaVirus? How are revenues, profits affected? Remember_profit=revenue-total costs. It may also be helpful to classify it as a supply shock or demand shock or as affecting both. How does the market, your industry, your firm get affected?).

How can you successfully navigate your business through such shocks for the security/protection (both financially and personally) of your employees and shareholders and both your family members and those of your employees?