ECON 545(DEVRY) help A Clearer path to student success/uophelp.com ECON 545(DEVRY) help A Clearer path to student suc | Page 31

Situation B
Your neighbor Cindy wants to start a contracting business for installing
solar panels. She has heard of the cost savings that households and
businesses can make each year by installing solar panels on their roofs.
Cindy has also heard of government incentives for installing solar panels.
Being concerned about the environment and wishing to reduce pollution,
Cindy thinks installing solar panels also serves a good social purpose.
But she does not want to risk her life savings on a venture that might not
succeed or become profitable enough. After hearing from you about
taking this course in business economics, she decides to ask you for
advice.
At first you are hesitant to give investment advice. Then you read the
piece “US boosts ‘game-changer’ solar technology in bid for global
market share” on page 374 of the textbook. You realize there are more
pieces to the decision than Cindy is considering. You decide to research
the market in terms of supply and demand, elasticity, costs of production,
pricing, and economic or normal profit or loss. You want to provide
Cindy with the most informed advice possible.
Situation C
Cousin Edgar is always thinking of the next business idea. This time, he
plans to invest in buying two gas stations. He reckons American
consumers have come to accept the high gasoline prices, and estimates
world prices for gasoline to increase even further with high demand
from India and China. Besides, Cousin Edgar thinks he will make a good
profit on the sale of convenience items at each station. But before buying
the gas stations, he decides to ask for your advice because you are taking
this course in business economics.
You happened to read the piece “$4-a-Gallon Gas Fueling Fears for
Recovery” on page 196 of the textbook. Being skeptical of Cousin