Econ503 - final presentation
- 1. Team MembersTeam Members: Karen Ning Frank Yang Chloe Zhang
- 2. Background Introduction • Business Type • Target Customers • Sample Selection
- 3. Business Type Early Childhood English Language Training;
- 4. Business Type 1 Native-English Speaker + 1 Dual-Language Teacher;
- 5. Business Type 3D Interactive SMART Board Technology;
- 6. Business Type Immersive & Fun Story-Telling Teaching Style.
- 7. Target Customers Children in China, aged 2-12; Mid-class & High-income Families; High-educated Families; People Tend to Study Abroad; Career-required.
- 8. Sample Selection Source: internal company data; Object: 1 specific learning center in Beijing; Range: first 3 years as a start-up center;
- 9. Supply Curve S = g (Px, Py, Pl, Tc, F) Price of substitutes ↑ Supply curve → Price of Input ↑ Supply curve ← Technology ↑ Supply curve → No. of Firms ↑ Supply curve →
- 10. Demand Curve Qx = f (Px, Py, N, I, T) Price of substitutes ↑ Demand curve → Population of customers ↑ Demand curve → Disposable Income ↑ Demand curve → Taste ↑ Demand curve →
- 11. Demand Supply Function Year 2011 Q: 406 P: $2003.08 Year 2012 Q: 754 P: $2159.23 Year 2013 Q: 1085 P: $2284.62
- 12. Cost Contains TWO parts: 1. Fixed Cost; 2. Variable Cost.
- 13. Fixed Cost Assume: • All the costs are fixed costs, except for the salary costs of those who offer classes to students; Reasons for doing this. Explain: • The difference between the real situation and what we assumed; eg: classes decoration and enough equipment for 10 classes.
- 14. Fixed Cost Year Monthly Rental $184,615.38 $15,384.62 Ads $9,230.77 $769.23 Utilities $3,692.31 $307.69 Decoration $23,076.92 $1,923.08 Other Staff’s Salary $73,846.15 $6,153.85 Equipment $55,384.62 $4,615.38 Total $349,846.15 $29,153.85
- 15. Variable Cost
- 16. Curve & Tendency (Monthly)
- 17. P=20.144*Q+31,650 Marginal Cost = $20.144 Monthly Marginal Revenue $2,285/12=$190 Only a few firms are in this new-born business. They have greater leverage on the price.
- 19. Production & Marginal Product • When add one more labor, how much the output increases; • It’s different from what we’ve learned theoretically: – the language instructors are more independent (Compare with the manufacture industry).
- 20. Early Childhood English Language Training
- 21. Monopolistic Competition All firms produce similar yet not perfectly substitutable products All firms are able to enter the industry if the profits are attractive. All firms are profit maximizers All firms have some market power, which means none are price takers
- 22. Market in Different Periods • Initially: – MR ＞ MC (Largely); – Barrier of Market Entry: LOW; – Market Type: New. • Gradually: – MC ↑, MR ↓. – More company get involved; – # of competition ↑.