ECON 525 SPRING

16
Demand
Analysis Paper
Description
and Outline

McGraw-Hill/Irwin

Copyright 2014 by The McGraw-Hill Companies, Inc. All rights reserved.

Demand Analysis
Project learning objective: Students will use
microeconomic theories and analytical skills
learned in this class to complete an analysis
of demand for a single good or service within
an actual market. Students will identify the
factors affecting demand and the effects that
these have on revenue.
Choose a product to study.
Clear your mind of preconceptions and pay
careful attention to the instructions that
follow.

In This Thought Paper

Very little data can be used (in fact, you need not to
use any hard data)
Any graphs are theoretical only but might be useful
This as an essay and you are expected to give your
opinions on
What variables or factors drive demand for your product
Why do people buy this product, what influence or motivate
potential consumers of the product

Focus needs to be on demand and on the consumer

Focus on the use of economic terminology (important)
Be careful not to write about firm strategy (i.e.
targeted markets; it is not a marketing paper)
Cite references, APA style not required

THIS IS NOT A RESEARCH

PROJECT

It is basically an essay
Information about the product is found on the
internet
Investigation involves reading about the
product and understanding why people want to
buy it instead of its competitor (micro analysis)
Explain what you think drives demand for this
product and that may be outside of the firms
control (macro analysis)
You are provided an educated opinion onto,
why do people buy this particular product?

Start Reading About the Product

Start with company website and product
description
Search for news articles (recent and old to
look for possible shifts in demand over
time)
Suggested sources:
ENMU library databases
Major newspapers
News magazines

Keep track of your sources

Identifying Determinants of Demand

to Discuss in Your Paper
Start by thinking about the generalized
demand function

where:
is the number of units of good X
demanded;
is the price of good X;
is the price of a related good Y;
is income;
is the value of any other variable
affecting demand.

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Identifying Determinants of Demand

to Discuss in Your Paper
Spend time on the other factors.
Clearly explain and with sufficient detail why
and how every determinant you identified
can affect or not the demand for the product.
The Bad: price is an important determinant of
demand

The Good: price is not an important determinant

of demand because it is a luxury good with few
substitutes that targets a niche market

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Paper Outline
A description of the firm and the product
Easy on the specs, spend more time on the
product, less on the firm (not to exceed one page)

A review of current events in the market,

Whats been happening to sales lately
You can also provide a historical perspective

A thorough and organized discussion

of the determinants of demand
A list of references used.

Demand
Come Up With A List Specific to Your
Product

What drives demand for this product in this

market?
List the main determinants of demand

Product characteristics
Price
Substitutes, Complements?
Income? Normal, inferior or luxury good?
Consumer tastes & preferences (fine tune, do not use as
category, it includes gender, age, geography, etc)
Advertising?
Institutions, demography, consumers expectations

Write a paragraph about each determinant of demand

on your list explaining why and how you think
consumers react to changes in this variable, ceteris
paribus
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Summary
This is not a paper about the product
This is not a paper about the firmthats the
supply side
Briefly give background information on the
product, the firm and the market
Spend most of the paper discussing
what you believe to be the
determinants of demand for this product
Present well, use paragraphs, clearly identify
the determinants you are discussing, etc.
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Format and Length

Submit a paper in a professional format
Well-written
Well-organized and structures
Easy to read
Correct grammar and spelling

You do need to begin your analysis of demand

with a bulleted list of the determinants of demand
Paper should not exceed five pages 1.5 pts
spacing (not including the cover page).
Description of firm, product, and current market
event cannot not exceed two pages.
Present well and include course number, paper
title, instructor, date, etc.
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How the Paper Will Be

Graded

Overall quality needs to be good

Needs to be written as an essay, not a
research paper
Needs to include a logical list of the
most important determinants of
demand
Each determinant of demand needs to
be explained logically and within
framework of managerial economics
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Revise and Resubmit

I will happy to review your first draft (must
be submitted at least four days before the
due date)
I will give you comments about
improvements needed
It probably will be best to discuss revisions
directly by phone, Collaborate or in person
After discussion and revision, grade
assigned is the final grade for this part of
the paper
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