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Economics 7 Pages

Long Term Investment Decisions

Question

Assume that the low-calorie frozen, microwavable food company from Assignments 1 and 2 wants to expand and has to make some long-term capital budgeting decisions. The company is currently facing increases in the costs of major ingredients.

Use the Internet and Strayer databases to research government policies and regulation.

Write a six to eight (6-8) page paper in which you:

Outline a plan that managers in the low-calorie, frozen microwaveable food company could follow in anticipation of raising prices when selecting pricing strategies for making their products response to a change in price less elastic. Provide a rationale for your response.

Examine the major effects that government policies have on production and employment. Predict the potential effects that government policies could have on your company.

Determine whether or not government regulation to ensure fairness in the low-calorie, frozen microwavable food industry is needed. Cite the major reasons for government involvement in a market economy. Provide two (2) examples of government involvement in a similar market economy to support your response.

Examine the major complexities that would arise under expansion via capital projects. Propose key actions that the company could take in order to prevent or address these complexities.

Suggest the substantive manner in which the company could create a convergence between the interests of stockholders and managers. Indicate the most likely impact to profitability of such a convergence. Provide two (2) examples of instances that support your response.

Use at least five (5) quality academic resources in this assignment. Note: Wikipedia does not qualify as an academic resource.

Your assignment must follow these formatting requirements:

Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.

Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

Propose how differences in demand and elasticity lead managers to develop various pricing strategies.

Analyze the economic impact of contracting, governance and organizational form within organizations.

Use technology and information resources to research issues in managerial economics and globalization.

Write clearly and concisely about managerial economics and globalization using proper writing mechanics.

Solution

Title: Long Term Investment Decisions
Length: 7 pages (1925 Words)
Style: APA

Preview

Long Term Investment Decisions

Low calorie frozen microwavable food company managers may follow specific plans in anticipation of raising prices following their expansion strategies. The elasticity of pricing calls for suave planning lest the business lose out in the competitive market. The pricing strategies selected can be based on various factors. For instance, it could be based on the associated costs of the products, the prevailing competition, and how the clients perceive the products. However, caution should be exercised when selecting these strategies to ensure that they complement each other (Allen& Albala, 2007). 

The managers, therefore, need to assess their pricing model early enough and keep the overall marketing approaches in mind before embarking on determining the strategies to be implemented.They can, for instance, adopt costs based pricing strategies where the price is determined by adding a particular percentage of the mark up or margin to the production and distribution costs of the products. They should, however, consider factors such as sales and the cost of goods sold. The managers can also follow the competition based pricing strategies. Such strategies help set the price of the products depending on the competition. Notably, this would allow the company to counter competition without necessarily causing an impact on its profits.

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