1.Find a business to survey. This can be any for-profit business—a gas station down the street, a family member’s or your own employer, or any other business—, but you’ll need to be sure you can speak or correspond with someone knowledgeable about the business— that is, able to answer the interview questions below. 2.Contact the person and ask if they are willing to participate. 3.Conduct the interview—that is, ask them for the information you need (see next section below). Note that your interviewee may not want to divulge all the information you’re looking for, or, more commonly, they will not want to give specific details. For instance, many business people will not be willing to tell you their company’s average costs. That’s okay. If they don’t want to answer, you can simply report that they declined to answer. More importantly, the information we’re looking for here is of a general nature. It’s not necessary to ask for, or to report in this assignment, in specific dollar figures. 4.Compile the information in a written report. you can make up the interview it ok.the rest of thin formation is in the doc attached.
business_interview_assignment__ec302__1.pdf
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ECON 302 – PROF. ERIK DEAN
BUSINESS INTERVIEW REPORT
DUE: MAY 5
For this assignment you will be engaging in empirical work—that is, you will be collecting,
compiling, and reporting the results of an interview with a knowledgeable person at a particular
business of your choosing. The purpose of this research is to learn about how businesses are
structured, how they perceive their environment, and how they behave. Specifically, you will be
interested in learning the nature of the business and the market it operates in, as well as its sales,
costs, and pricing.
The list under Information to Collect below indicates the information you are to collect by
interviewing a knowledgeable person who owns or works at a business. You will speak with this
person (face-to-face, by phone, by email, or whatever works best), collect this information to the
fullest extent possible, compile the information, and submit your research as a written report
(usually 4-6 pages).
Steps to Completing the Assignment
1. Find a business to survey. This can be any for-profit business—a gas station down the
street, a family member’s or your own employer, or any other business—, but you’ll need
to be sure you can speak or correspond with someone knowledgeable about the business—
that is, able to answer the interview questions below.
2. Contact the person and ask if they are willing to participate.
3. Conduct the interview—that is, ask them for the information you need (see next section
below). Note that your interviewee may not want to divulge all the information you’re
looking for, or, more commonly, they will not want to give specific details. For instance,
many business people will not be willing to tell you their company’s average costs. That’s
okay. If they don’t want to answer, you can simply report that they declined to
answer. More importantly, the information we’re looking for here is of a general nature. It’s
not necessary to ask for, or to report in this assignment, in specific dollar figures.
4. Compile the information in a written report.
5. Upload your report to Canvas for grading.
Information to Collect
The information you will be collecting in your interview falls into three categories as given below.
Note: it is advisable that you contact a suitable person to interview early in the semester. You may
interview them on the first five sections of questions below at that point. However, you may want
to wait until roughly the middle of the semester to cover the last set of questions as these may
require that you explain what economists have in mind (with concepts like average total costs) and
that material will not be covered in class until the middle of the semester.
1. Basic Information
Name and location of business
Name of interviewee, their position in the business, and contact information (this is
required so that your professor can verify that the interview took place)
2. Nature of the Business and its Market(s)
Size of business (in terms of number of employees, annual revenues, or whatever is most
appropriate)
Product(s) sold—could be a good or a service.
Degree of competition. For instance, is the market very competitive, somewhat
competitive, or does this business hold a near or pure monopoly in the market?
Form(s) of competition. In what ways does the business compete (for instance, through
low prices, product quality, marketing, product innovations, or something else)? If the
business competes in several ways, rank them in order of importance to the success of the
business.
3. Nature of Customers and Demand
How important is customer goodwill/loyalty to your business, why, and how does the
business seek to promote goodwill/loyalty (if it does)?
What is the normal (own-price) elasticity of demand for your product(s)?
o Note, you may have to explain what this term means to the interviewee. Refer to
section 2.1 for discussion of the concept.
4. Sales
How variable are sales? For instance, ‘fairly stable from week to week, but some months
are better than others’, versus ‘sales fluctuate on a daily basis’, versus sales are stable over
long periods of time (perhaps due to long term contracts or other factors).
What are the primary reasons for fluctuations in sales? Are there short-, medium-, and
long term fluctuations?
5. Prices
What determines the price(s) of the product(s) the business sells?
o Note, this is a general, open-ended question. Answers might include ‘we set the
price based on ____,’ ‘The local market sets the price,’ ‘Our prices are mainly the
result of contract negotiations,’ and so on. It should be a good starting point for a
more in-depth conversation about the nature of prices and their determinants.
How variable is/are the price(s) of the product(s) the business sells? For instances, does
the business change its price(s) daily, monthly, yearly, or longer?
What are the primary reasons for changes in price? Are there reasons that prices don’t
change/aren’t changed more frequently?
If the business sets its prices, are adjustments to prices state-dependent (that is, ‘we
changed our price because something specific happened), or periodic (that is, ‘we review
our prices and change them if needed every ___ months’)? If periodic, how often does the
business review the price(s) of the product(s) it sells, and are there any lags between the
timing of the event and the resulting price adjustment?
6. Costs
1
[Note: this section can be very tricky. You will need to use your understanding of the
relevant cost concepts from the course (specifically, marginal cost and average total cost)
and work with your interviewee to translate between how he or she thinks about the
business and how economists think about this topic. Expect to take some time and effort
to make sense of these questions to your interviewee and to elicit meaningful responses
from them. Don’t necessarily expect, however, that their responses will reflect the
particular assumptions and graphs that you’ve seen in your textbook.]
As output increases over some relevant short-term time, do marginal costs increase,
decrease, or remain constant?
o Note: you may have to explain to the interviewee what ‘marginal cost’ means and
help the interviewee interpret their own knowledge about the business in a way that
can be translated into a statement about the nature of marginal costs.
How do average total costs change when the business is producing more of its product in
a given period versus when it’s producing less, versus somewhere in the middle.
o Note: you want to know here about what economists usually call average total
costs, though businesspeople are more likely to use terms like ‘unit cost’ 1 if they
think in this manner at all. Whatever the preferred term, what you’re looking at
is the total costs of production in whatever the relevant ‘short run’ time period is
divided by the quantity being produced.
o More specifically, you want to know whether the unit cost of production goes up
or down (or down, then back up, and so on) when the business is producing more
units versus fewer. Again, the business doesn’t need to share any actual dollar
values if they don’t want to in order to answer this question. You’re just looking
for the direction of change over different levels of production (output).
o Here’s a completely hypothetical example with made-up numbers to make this
clearer. Suppose a restaurant owner is thinking in terms of week-to-week (that is,
short run) operations. In a typical week, the restaurant serves, say, 2,000 meals. Its
costs include, say $5,000 to servers, cooks, management and so on, and $8,000 for
ingredients for the meals. Monthly utilities and rent come out to around $12,000,
so one week’s worth is about $3,000. Hence, total costs for the week are $16,000
and average total costs come out to 16,000/2,000 = 8 dollars per meal. Now, you
don’t need the person you’re interviewing to report what that dollar figure for their
business is, though it’s fine to report it if the interviewee is comfortable sharing
it. What we want to know is: when sales are lower than typical (say, on a slow
A good overview of the specific meaning of this term can be found at
https://www.investopedia.com/terms/u/unitcost.asp
o
week) do average total costs go up or down? Likewise, when sales are higher (a
good week) do average costs go up or down.
The curves below give three basic possibilities for this question. In the graph on
the left, average total cost first declines as output increases, but then bottoms out
and starts to increase after some lowest-average-cost level of production. The graph
in the center indicates that average cost simply decreases as output increases; while
the graph on the right indicates that average cost simply increases.
…
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