Overview
Assignment Scenario and Choice of Organization:
Select a real organization, a credible industry case, or a carefully constructed business scenario. The
organization must face one central decision: for example, entering a market, revising a product price,
making an investment, sourcing or selling internationally, changing a market strategy, or negotiating a
material business arrangement. Your report must remain focused on that single decision while
demonstrating how the Module 1-8 topics shape the recommendation.
If you use a constructed scenario, identify all assumptions clearly and use reasonable, internally
consistent data. If you use a real organization, distinguish sourced facts from your own assumptions and
analysis.
Student Instructions
Prepare an individual managerial economics decision report that answers the following question: What
should the decision-maker do, why is that option economically preferable, and how would uncertainty
or strategic responses change the recommendation? Write for a manager who needs a clear
recommendation and a transparent rationale.
1. Use the required report sections below, in the stated order. Headings may be adapted to fit the
organization or scenario.
2. Integrate quantitative analysis where it improves the decision. Show formulas, assumptions,
intermediate calculations, and interpretation; place detailed calculations in an appendix when
needed.
3. Address every course theme listed in the Required Sections and Deliverables. Where a topic is not
directly applicable, explain why and analyze the most relevant managerial implication rather than
omitting it.
4. Use credible academic, professional, government, industry, or organizational sources. Cite all
borrowed facts, data, figures, and ideas.
5. End with a specific recommendation, implementation implications, and the conditions that would
cause you to revisit the decision.
Required Sections and Deliverables
1. Executive Decision Summary:
State the decision, your recommended action, the principal economic rationale, and the most important
risk or contingency. This section should be concise and written for a managerial audience.
2. Decision Context, Costs, and Benefits:
Define the decision-maker, objective, alternatives, relevant constraints, and time horizon. Identify
relevant costs and benefits, including opportunity costs and sunk costs where applicable. Explain the
trade-offs that matter to the decision.
3. Demand, Pricing, and Output Analysis:
Describe demand conditions and the relevant customers or segments. Analyze determinants of demand
and price elasticity when feasible. Use demand, revenue, cost, and marginal reasoning to justify pricing
and/or output implications.
4. Investment and Capital Decision Analysis:
Evaluate the investment, capacity, entry, technology, or other long-term commitment embedded in the
scenario. Present cash-flow assumptions and apply an appropriate investment criterion, such as net
present value, incremental analysis, payback, or a justified alternative.
5. Market Structure and Competitive Strategy:
Classify the relevant market structure and explain how it affects pricing power, entry, output, profit
expectations, and competitive behavior. Connect the structure directly to the central decision.
6. International Trade and Foreign Exchange:
Analyze trade, sourcing, exporting, importing, tariffs or trade exposure, and foreign-exchange effects
when relevant. If the decision is domestic, explain how international conditions or exchange-rate
changes could still affect costs, demand, competition, or risk.
7. Price Discrimination, Strategic Games, and Bargaining:
Evaluate whether price discrimination is feasible and economically defensible. Analyze a strategic
interaction with a competitor, supplier, customer, or bargaining counterpart using a payoff table,
decision tree, game-theory logic, or another transparent framework. Explain the likely response and
your strategic position.
8. Decision-Making Under Uncertainty:
Identify the principal uncertain variables and construct at least two plausible states of the world or
scenarios. Use sensitivity, expected-value, decision-tree, or risk analysis as appropriate. Explain how the
recommendation changes, if at all, under adverse conditions.
9. Recommendation and Implementation Conditions:
Provide a clear final recommendation. State the actions to take, the evidence that supports the choice,
leading indicators to monitor, and decision thresholds or trigger conditions for reconsideration.
References and Appendices
Include an APA-formatted reference list and appendices for detailed calculations, exhibits, tables,
figures, assumptions, payoff matrices, decision trees, or supporting data.
Analysis Expectations
Economic logic: Move beyond description. Explain causal relationships and trade-offs using the concepts
of managerial economics.
Quantitative support: Include at least three decision-relevant analyses or exhibits. At minimum, include
one demand/pricing or cost analysis, one investment or incremental decision analysis, and one strategic
or uncertainty analysis.
Assumptions and transparency: Label assumptions, justify them where possible, and test the most
decision-sensitive assumptions.
Managerial relevance: Translate findings into an actionable choice, not merely a summary of economic
concepts.
APA and Writing Requirements ; BOOK (Froeb, L. M., McCann, B. T., Ward, M. R., & Shor, M. (2018). Managerial Economics: A Problem Solving Approach (5th ed.). Cengage Learning.
- Use current APA style for in-text citations, reference entries, tables, figures, and appendices, as
applicable.
logical transitions.
rather than padding.