Overview
Writing Assignment
Topic: Applying Economic Decision-Making to a Business Scenario
Purpose
The purpose of this assignment is to help you apply the fundamental principles of
managerial economics to a real-world business decision. Organizations constantly face
choices involving limited resources. Successful managers evaluate benefits, costs, and
opportunity costs before making decisions that maximize value.
Scenario
You have recently been hired as a business analyst for a small coffee shop chain that plans
to expand into a new neighborhood.
The owner has identified two possible locations:
Location A
Location B
The owner asks you to recommend which location should be selected.
Assignment Instructions
Prepare a 2–3 page paper (excluding the title and reference pages) that addresses the
following:
1. Explain the One Lesson of Business
Define the concept in your own words and explain why businesses should make decisions
that create value.
2. Analyze Benefits and Costs
Discuss explicit costs, implicit costs, and opportunity costs. Explain how each influences the
decision.
3. Recommend the Better Location
Evaluate both locations by considering expected revenue, costs, competition, profitability,
opportunity cost, and long-term business success. Support your recommendation with
economic reasoning.
4. Reflection
Discuss how managerial economics helps managers make better business decisions under
uncertainty.
Requirements
Suggested Paper Organization