Microeconomic Analysis of Ford Motor Company

Introduction
Work with your instructor to choose a firm that matches the following criteria: a publicly traded company operating in the U.S. market that is currently in business.

a) Outline the purpose of this paper and how it will inform your conclusion.

b) Summarize the history of the firm, and provide an overview for what the firm does and what goods/services it sells.

Explore the supply and demand conditions for your firm’s product.

a) Evaluate trends in demand over time, and explain their impact on the industry and the firm. You should consider including annual sales figures for the product your firm sells.

b) Analyze information and data related to the demand and supply for your firm’s product(s) to support your recommendation for the firm’s actions. Remember to include a graphical representation of the data and information used in your analysis.

Examine the price elasticity of demand for the product(s) your firm sells.

a) Analyze the available data and information, such as pricing and the availability of substitutes, and justify how you determine the price elasticity

of demand for your firm’s product.

b) Explain the factors that affect consumer responsiveness to price changes for this product, using the concept of price elasticity of demand as your

guide.

c) Assess how the price elasticity of demand impacts the firm’s pricing decisions and revenue growth.

Examine the costs of production for your firm.

a) Analyze the various costs a firm faces, their trends over time, and how they have impacted your firm’s profitability.

b) Apply the concepts of variable and fixed costs to your firm for informing its output decisions. For instance, analyze how different kinds of costs

(labor, research and development, raw materials) affect the firm’s level of output.

Explore the overall market for your firm

a) Discuss the market share of the firm and its top competitors by providing details on current percentages for each firm and describing the trend

over time. You might consider presenting the data graphically.

b) Analyze the barriers to entry in this market to illustrate the potential for new competition and its impact on your firm’s future in the market.

c) Describe the market structure for this firm, and analyze how this affects the firm’s ability to influence the market.

Recommendation

a) Develop a recommendation for how the firm can manage its future production by synthesizing the data presented.

b) Suggest how the firm’s position within the market and among its competitors will allow it to take your recommended action.

c) Describe how the firm can sustain its success going forward by evaluating the findings from demand trends and price elasticity.