QUESTION

# I need someone to do part 2 and 3 of my project, will gladly pay off this site if you can do it Part 2:

I need someone to do part 2 and 3 of my project, will gladly pay off this site if you can do it

Part 2: First Price Recommendation

Due Tuesday, February 14 (20 points)

• Use a regression to estimate total costs as a function of quantity. Use the same data file as in part 1.
• Use the cost estimates and the demand estimation from part 1 to find marginal cost and marginal revenue.
• Find the profit-maximizing quantity and price. Use the profit-maximizing price as your price recommendation.
Written Report

Rough Draft due Tuesday, February 21 (20 points) Peer Edit due Tuesday, February 28 (optional)Final Draft due Tuesday, March 7 (150 points)

The written report should be 3-5 pages in length (including any graphs, calculations, or tables). It does not need a cover page. It should have four sections:

1. Introduction or Executive Summary - In one to two paragraphs report your price recommendations and provide a concise summary of the procedure you used to arrive at them.
2. Demand estimation - Explain briefly the concept of a demand curve and how the market experiment allows it to be known. Explain the procedure in estimating it. State your estimated demand curve. Discuss how well regressions fit the data and give a warning on when your estimates should or should not be used.
3. Cost estimation - Explain how you estimate costs. Show total costs as function of output quantity, and comment on how closely it fits the data. Discuss what marginal costs you estimate and why they might differ from the wholesale cost of inputs. Discuss what might render your estimates obsolete.
4. First price recommendation - Present your recommendations for a profit-maximizing price under the assumption the market conditions and production technology remain stable. Forecast revenue and profits at that price.
5. Second price recommendation - Present your recommendations for a profit-maximizing price assuming costs change so that the fixed cost becomes \$3,100,000 with constant marginal cost of \$6 per unit of output. Give revenue and profit targets.
6. Conclusion (optional)

Assignments must be typed, professional looking, carefully edited, and follow the requirements of the assignment. Explanations should be of such depth and quality that a boss or graduating business major would have confidence in your recommendations.

Because each student has a unique data file, estimation results will also be different. The written explanations must be you own. Classmates and anyone else may proofread. Acknowledge all help you have received in an endnote.