Capstone Project – Economics

Writing Assignment #11/Capstone Project: Additional Guidance
Posted on: Thursday, April 30, 2020 12:01:00 AM EDT

First, let me correct the assignment number; The Capstone Project is Writing Assignment #11, not #12 as previously stated.

It might be helpful to first clarify what the capstone/corporate analysis is NOT; It is not a performance analysis of a specific company or an equity valuation; It is not a “puff” piece extolling management genius or corporate culture, nor is it a “critique” of management failures.

While some degree of “normative” observations are acceptable in characterizing a selected company and the industry it operates in, the project is intended to be primarily a “positive” (i.e., data and fact driven) microeconomic analysis of a defined “market” using a selected company as both springboard and context.

Throughout this course we have examined:

The determinants of demand: # of buyers, incomes, expectations, substitutes & complements, and Price (including elasticity).
The determinants of supply: # of sellers, cost of inputs & technology (i.e., a production function), expectations and Price (including elasticity).
Firm behavior under differing market structures: competitive, monopolistic, oligopolistic, and monopolistic-competitive.
Externalities: positive/negative, public policies toward externalities, the impact of taxes on social welfare.
Your task is to draw on information provided in a company’s 10K/annual report, analyst reports, or other sources (e.g., industry analyses), not to replicate or summarize those reports, but to synthesize your own economic analysis of a “market” that you choose to define. Your analysis of all the above-mentioned market components, that is, closely following the prompts/questions given in the assignment, should be based on data. Of course, you will never have complete information, so you must extend your “thinking like an economist” to construct a coherent “mosaic”.

A final note: This is a “moderated forum”. You submit your draft as usual in the forum. However, it will not show up as “published” (available in the forum) but instead will be “Queued for Moderation”. I will review the draft and return it to you with comments. After making any revisions, you can return it to the moderation queue, from which I will then publish the document.

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The final Writing Assignment for this course is a “Capstone” on all the component analyses examined throughout the course. For the assignment, you are to:

a) Select a specific business firm of interest to you (this can be any firm, but a publicly-owned enterprise with readily available information — annual report to stockholders, 10K SEC filing, analyst reports, etc — will greatly facilitate your data/information-gathering task).

b) Describe what the firm does, its primary inputs, and its base of consumers (buyers); define the market the firm operates in;

c) Analyze the demand for the firm’s product(s);

d) Evaluate the factors affecting the firm’s production costs and supply decisions;

e) Explain the behavior of the firm within the market structure it operates in;

f) Recognize any market imperfections and identify the role that government may play in addressing those imperfections;

g) Drawing on all the above, comment and render an opinion (based on your economic analysis) on any major policy issues confronting the firm.

Your initial draft of this assignment should be submitted

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550 WORDS