Supply and Demand

Supply and Demand

For the SLP this session, come up with an idea for a business you would like to start someday.
This should be a business in an industry that you are familiar with and can find a lot of
information about. This could be a type of business that you are currently working for or have
worked for in the past, or a type of business that you are a frequent customer of. Finally – since
you will have to make estimates about costs of starting up the business or what type of price you
can charge, it is best to keep your business idea relatively simple.
For this first SLP, discuss your business idea and do some initial research on what prices your
potential competitors in your home town are charging. More specifically, write a three-page paper
discussing the following issues:
What business do you want to start, and why? Explain your personal connection to this type of
business and discuss sources of information about this business that you plan to use for your SLP.
What prices are these businesses in your chosen industry charging? Try to get at least ten
examples of businesses and the prices they are charging, and create a table that lists the prices
and any other relevant information, such as whether the product they sell is high-end quality or
lower-end quality.
Do you notice a large range of prices that businesses are charging for the service or product? If
so, what factors do you think explain the range of prices? Is it the quality of the product or
service, location of the business, amount of advertising done by each business, other?
Based on your answers to Questions 1 and 2 above, do you think your product or service will
have elastic or inelastic demand? You don’t have to do any calculations since you probably won’t
have access to sales data on the businesses you are looking at – but based on the range of
prices, you should be able to get an idea about how sensitive consumers of your product or
service will be to changes in price. In addition to your own research about prices in your home
town, cite some of the required background reading on elasticity to justify your answer.
SLP Assignment Expectations
Answer the assignment questions directly.
Stay focused on the precise assignment questions. Do not go off on tangents or devote a lot of
space to summarizing general background materials.

Make sure to use reliable and credible sources as your references. Articles published in
established newspapers or business journals/magazines are preferred. If you find articles on the
Internet, make sure they are from a credible source.