For the case Study, make sure to add conclusion on it and use background readings for references along with other peer reviewed articles/journals. Minimum length is 3 pages

Module 2 – Case

PRODUCTION AND COSTS

Assignment Overview

Before 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 both 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). Note that you need to use Microsoft Excel to do the graphs for the numerical problems.

Case Assignment

Part A: Conceptual questions

1. Suppose you own a television factory and at your current level of output you have average total cost of $800 per television, average variable costs of $700 per television, and a marginal cost of $400. If the price your buyers are willing to pay is $500, should you decrease or increase production? Explain your reasoning, and make sure to cite at least one of the required readings in your answer.
2. You are the owner of a restaurant, and currently you have only one waiter. While this keeps costs down, many of your customers go home because they are tired of waiting in line or waiting for their order. You hire four more waiters and waitresses, and you are now able to serve a dramatically higher number of customers. Seeing the huge productivity gains from hiring more staff, you then hire 20 more waiters and waitresses. However, you are not able to serve any more customers than you were able to when your staff size was only four. In fact, your restaurant has become overly crowded because there is not enough room in your restaurant for all of your staff. You are confused as to why hiring four more staff members increased your productivity, but hiring 20 more did not. What concept from the background readings best describes what happened in this case? Explain your reasoning.

Part B: Quantitative problems

The following table gives the total weekly output of bicycles at Al’s Bicycle Town.

Table 1

Labor Total Product (TP) Average Product of labor (AP) Marginal Product of labor (MP)

0 0 na na

1 100 100 100

2 300 —– ___

3 450 ___ ___

4 ___ ___ 110

5 630 ___ ___

6 ___ 110 ___

• Complete this table.
• Draw the graphs of the marginal product (MP) and the average product (AP).

• To learn how to plot the data in Excel, see https://www.youtube.com/watch?v=B3U9tDcoNeI

• Where do the AP and MP curve cross?

The cost of 1 worker is $2000 per month. Total fixed cost is $4000 per month.

• Complete Table 2 using your answers from Table 1 and by computing total variable cost (TVC) and total cost(TC).

Table 2

Labor Total Product (TP) Total variable cost (TVC) Total cost (TC)

0 0 na 4000

1 100 2000 ___

2 300 —– ___

3 450 ___ ___

4 ___ ___ 12000

5 630 ___ ___

6 ___ 12000 ___

• Draw the graphs of the TC and TVC curves. What is the relationship between these two curves?

• Complete Table 3 by using your answers from the previous Tables and calculating the AVC, ATC, and MC.

Table 3

Total Product (TP) Average variable cost (AVC) Average total cost (ATC) Marginal cost (MC)

0 na na na

100 20 ___ 20

300 —– ___ ___

450 ___ ___ ___

___ ___ 21.43 ___

630 ___ ___ ___

___ ___ ___ 66.67

• Draw the graphs of the ATC, AVC, and MC curves. What is the relationship between the ATC and AVC curves? Between the MC and AVC curves?

Assignment Expectations

• Answer 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.

Rubric Name: MBA/MSHRM/MSL Case Grading Rubric for Quantitative Business Courses -Timeliness v1

Criteria	Level 4 – Excellent	Level 3 – Proficient	Level 2 – Developing	Level 1 – Emerging
Assignment-Driven Criteria	19 points Demonstrates mastery covering all key elements of the assignment in a substantive way.	18 points Demonstrates considerable proficiency covering all key elements of the assignment.	17 points Demonstrates partial proficiency covering all key elements of the assignment.	16 points Demonstrates limited or poor proficiency covering all key elements of the assignment.
Presentation, Computation, and Relevance of Quantitative Information	10 points Demonstrates mastery in presenting quantitative information in a format appropriate for the discipline. Supporting computations are relevant and accurate.	9 points Demonstrates considerable proficiency in presenting quantitative information in a format appropriate for the discipline. Supporting computations are mostly relevant and accurate.	8 points Demonstrate partial proficiency in presenting quantitative information in a format appropriate for the discipline. Supporting computations are not necessarily relevant and somewhat misleading.	7 points Demonstrates limited or poor proficiency in presenting quantitative information in a format appropriate for the discipline. Supporting computations are not relevant, misleading or absent.
Critical Thinking	10 points Analyzes quantitative and qualitative information as the basis for deep and thoughtful discussion, drawing insightful, carefully qualified conclusions from this work.	9 points Analyzes quantitative and qualitative information as the basis for competent and thoughtful discussion, drawing reasonable and appropriately qualified conclusions from this work.	8 points Analyzes quantitative and qualitative information as the basis for workmanlike (without inspiration or nuance, ordinary) discussion, drawing plausible conclusions from this work.	7 points Analyzes quantitative and qualitative information as the basis for tentative or limited discussion; and is hesitant or uncertain about drawing conclusions from this work.
Business Writing	6 points Demonstrates mastery and proficiency in written communication to an appropriately specialized audience.	5 points Demonstrates considerable proficiency in written communication to an appropriately specialized audience.	4 points Demonstrate partial proficiency in written communication to an appropriately specialized audience.	3 points Demonstrates limited or poor proficiency in written communication to an appropriately specialized audience.
Timeliness	5 points Assignment submitted on time or collaborated with professor for an approved extension on due date.	3 points Assignment submitted 1-2 days after module due date.	2 points Assignment submitted 3-4 days after module due date.	0 points Assignment submitted 5 or more days after module due date.
Overall Score	Level 4 45 or more	Level 3 40 or more	Level 2 35 or more	Level 1 0 or more

Module 2 – SLP

PRODUCTION AND COSTS

For Module 1, you did research on consumer demand and pricing for your business idea. Continue with the same business idea that you wrote about for Module 1, but now look at the cost side of your business.

Do some research on various potential start-up expenses for your business based on research on wages, office space rental rates, etc., in your home town. More specifically, write a three-page paper answering the following questions:

1. What do you think the main expenses will be for your business? Make sure to discuss labor, rent, equipment, and any other major expense you can think of.
2. Do some research on the internet or from your own personal contacts to get a ballpark estimate of how much the specific expenses are in your home town for the items that you listed in your answer to Question 1 above. You can use Craig’s List or similar webpages to get an idea about wages for different positions that you may need to hire for, and there are many webpages that have advertisements for renting commercial property in different parts of the country.
3. Finally, break down your expenses into fixed plus variable costs. Make sure to cite two of the required background readings as justification for your classifications of your different expenses into the fixed and variable cost categories.

SLP Assignment Expectations

Answer 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.
• Make sure to use reliable and credible sources as your references. Articles published in established newspapers or business journals/magazines are preferred. If you find articles on the Internet, make sure they are from a credible source.
• 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.

Rubric Name: MBA/MSHRM/MSL SLP Grading Rubric for Quantitative Business Courses -Timeliness v1

Criteria	Level 4 – Excellent	Level 3 – Proficient	Level 2 – Developing	Level 1 – Emerging
Assignment-Driven Criteria	9 points Demonstrates mastery covering all key elements of the assignment in a substantive way.	8 points Demonstrates considerable proficiency covering all key elements of the assignment.	7 points Demonstrates partial proficiency covering all key elements of the assignment.	6 points Demonstrates limited or poor proficiency covering all key elements of the assignment.
Presentation, Computation, and Relevance of Quantitative Information	7 points Demonstrates mastery in presenting quantitative information in a format appropriate for the discipline. Supporting computations are relevant and accurate.	6 points Demonstrates considerable proficiency in presenting quantitative information in a format appropriate for the discipline. Supporting computations are mostly relevant and accurate.	5 points Demonstrate partial proficiency in presenting quantitative information in a format appropriate for the discipline. Supporting computations are not necessarily relevant and somewhat misleading.	4 points Demonstrates limited or poor proficiency in presenting quantitative information in a format appropriate for the discipline. Supporting computations are not relevant, misleading or absent.
Critical Thinking	6 points Analyzes quantitative and qualitative information as the basis for deep and thoughtful discussion, drawing insightful, carefully qualified conclusions from this work.	5 points Analyzes quantitative and qualitative information as the basis for competent and thoughtful discussion, drawing reasonable and appropriately qualified conclusions from this work.	4 points Analyzes quantitative and qualitative information as the basis for workmanlike (without inspiration or nuance, ordinary) discussion, drawing plausible conclusions from this work.	3 points Analyzes quantitative and qualitative information as the basis for tentative or limited discussion; and is hesitant or uncertain about drawing conclusions from this work.
Business Writing	5 points Demonstrates mastery and proficiency in written communication to an appropriately specialized audience.	4 points Demonstrates considerable proficiency in written communication to an appropriately specialized audience.	2 points Demonstrate partial proficiency in written communication to an appropriately specialized audience.	0 points Demonstrates limited or poor proficiency in written communication to an appropriately specialized audience.
Timeliness	3 points Assignment submitted on time or collaborated with professor for an approved extension on due date.	2 points Assignment submitted 1-2 days after module due date.	1 point Assignment submitted 3-4 days after module due date.	0 points Assignment submitted 5 or more days after module due date.
Overall Score	Level 4 27 or more	Level 3 24 or more	Level 2 21 or more	Level 1 0 or more

Module 2 – Background

PRODUCTION AND COSTS

Required Reading

To start off this module, watch the following videos which will give you an introduction to some of the main concepts for this module. Pay special attention to the discussion about fixed versus variable costs and accounting versus economic profit:

Clifford, J., & Hill. J. (2016). Revenues, profits, and price. CrashCourse. https://www.youtube.com/watch?v=UWImfFax8Ew

The following book will give you a relatively simple introduction to the key concepts covered in the module. In addition to the concepts, make sure to go carefully through the numerical examples. Read Chapter 7 of the following book (use the “Contents” tab to navigate though Sections 7.1, 7.2., and 7.3):

Taylor, T. (2014) Principles of Microeconomics. OpenStax College. http://cnx.org/contents/6i8iXmBj@11.2:75YRzeYw@8/Introduction-to-Cost-and-Indus

Now go to this slightly more advanced book chapter that will cover the concepts from this module from the point of view of a business manager. Pay special attention to the tables and numerical examples:

Marburger, D. R., & Peterson, R. (2013). Chapter 4: What your cost accountant can’t measure: The economic theory of production and costs. Economic Decision Making Using Cost Data: A Manager's Guide. New York, NY: Business Expert Press. [EBSCO eBook Collection. Note: to find the book enter only the title of the book in the library search engine]

Optional Reading

Beveridge, T. M. (2013). Chapter 5: Production, costs, and revenues. A Primer on Microeconomics. New York, N.Y.: Business Expert Press. [EBSCO eBook Collection]