microeconomic project presentation
TRANSCRIPT
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 1/21
Group 1:•
Ha Thi Van Anh• Ngo Quynh Hoa• Truong Thi Tuyet
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 2/21
Content
I. Overview
II. Market
III. Taxes
IV. Costs
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 3/21
I. Overview
1. Basic background of the bookstore
Name: Thanh Xuan BookstoreLocation: roundabouts the area of HANU
Area: 25 m 2
Capital: 75,000,000 VND
Open hours: 9 am – 9 pm
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 4/21
Picture 01:The design of TX
Bookstore
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 5/21
I. Overview
2. Products
Main products: books (from domestic publishers)
Supplementary products:Magazines
Stationeries
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 6/21
I. Overview
3. Human resource
Hire 4 employees (students)
Salary: 1,500,000 VND/month2 for morning shift ( 9 a.m – 3 p.m)2 for night shift ( 3 p.m – 9 p.m)
3 of us as the managersSalary: 4,000,000 VND/month + the proportionalprofit
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 7/21
I. Overview
4. Target customers:
Students from high schools and universities
nearby
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 8/21
I. Overview
5. Competitors in the area
Quy Tai Bookshop
FAHASA the book supermarket
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 9/21
II. Market
1. Factors affecting demand
Aggregate real income
Price of e-books and books from foreignpublishersNumber of readers
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 10/21
II. Market
2. Factors affecting supply
Paper price
Printing technologyNumber of other bookshops in the area
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 11/21
III. Market
3. Equilibrium condition
Price/unit Quantity demanded Quantity supply
11,000 95 65
13,000 75 75
15,000 55 85
17,000 35 95
19,000 15 105
Table 01: Demand and supply schedule for books
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 12/21
Figure 01:
The equilibrium of supply and demand
Equilibriumpoint
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 13/21
II. Market
4. Elasticity
Ed = 1.4 > 1 demand for books market is elastic.
E s = 0.8 < 1 supply for books market is inelastic.
Our pricing strategy: reduce the price of books to
increase the total revenue
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 14/21
III. Taxes
1. Registration tax1,000,000 VND per year
2. Enterprise Income Tax10% of the net income
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 15/21
IV. Costs
1. Opportunities costsa. Explicit costs
Fixed cost:o Rent expense: 5,000,000 VNDo Salary expense: 18,000,000 VNDo Depreciation expense: 100,000 VND
------------------------------------------------------------------
Fixed cost per month: 23,100,000 VNDFixed cost per day: ~ 800,000 VND
Variable cost:
Utilities expense, cost of goods sold, enterpriseincome tax
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 16/21
IV. Costs
1. Opportunities costsb. Implicit costs
Cost of labor: 12 * 2,800,000 VND Cost of capital: 9,000,000 VND
------------------------------------------------------------- our total yearly implicit cost: 42,600,000 VND
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 17/21
IV. Costs
2. Various measures of costsa. Cost tableb. Cost curves
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 18/21
Quantity
of books
(100-pages
per day)
Total
Cost
Fixed
Cost
Variable
Cost
Average
Fixed
Cost
Average
Variable
Cost
Average
Total
Cost
Marginal
Cost
0 800 800 0 ----- ----- ----- 2,0
4,5
7,0
9,5
12,0
14,5
17,0
19,5
22,0
24,5
10 820 800 20 80,0 2,0 82,0
20 865 800 65 40,0 3,3 43,3
30 935 800 135 26,7 4,5 31,2 40 1030 800 230 20,0 5,8 25,8
50 1150 800 350 16,0 7,0 23,0
60 1295 800 495 13,3 8,3 21,6
70 1465 800 665 11,4 9,5 20,9
80 1660 800 860 10,0 10,8 20,8 90 1880 800 1080 8,9 12,0 20,9
100 2125 800 1325 8,0 13,3 21,3
Table 02: TX Bookstore’s DifferentCosts
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 19/21
Efficient
scale
Figure 02: TX Bookstore’s Average -Costs and Marginal-Cost
Curves
8/11/2019 Microeconomic Project Presentation
http://slidepdf.com/reader/full/microeconomic-project-presentation 20/21
IV. Costs
3. Business decisionsa. P > ATC min profit > 0 continue the
business
b. P = ATC min profit = 0 continue thebusiness
c. P < ATC min profit < 0In the long run, exit the marketIn the short run:
o P > AVC min continue the business atlower quantity sold.
o P < AVC min shut down the business