Economics

Milestone 1: Business Recommendations Based on Economic Projections

Business Recommendations Based on Economic Projections

Economics

Business Recommendations Based on Economic Projections

Market Structure

Business recommendations for Big Drive Auto will focus on pricing strategies, possible economic change over the next five years, business decisions related to trade and specialization and how they will affect future global conditions, and credit markets. Three considerations demonstrate an outcome for a pricing strategy; demographic factors, psychological factors, and elasticity. Big Drive Auto would be a monopolistic competitor through production and sales of vehicles, services, parts, motor oil, coolant, and tires. According to McConnell, Brue & Flynn (2009), monopolistic competition is characterized by relatively large number of sellers producing differentiated products. Over the past ten years, Big Drive Auto has kept record of sale volume, and in some cases, units sold. The record keeping will help define the best pricing strategy recommendations, for non-price barriers to entry, and ideas for product differentiation for the organization. Overall, the recommendations will assist in making business decisions based on change that may occur in the economy over the next five years.

Pricing Strategy Recommendations

Pricing services and goods is critical, primarily because it drives the firms’ economics and defines value at a given price. Big Drive Auto is a car dealership that works out of multiple states and deals with multiple manufactures. Reviewing current statistics over the past ten years will help, but not solve a definite pricing strategy for Big Drive Auto.

A competitive firm opposed to a monopolistic competitor can drive different outcomes for the firm. Big Drive Auto being a monopolistic competitor is due to the multiple firms, differentiated types of products, some control over price, and where they stand with non-price...