Economic Analysis of a Domestic Firm
Select a Fortune 500 company (https://fortune.com/global500/search/). Look up the company’s annual report. Wikipedia (https://en.wikipedia.org/wiki/List_of_S%26P_500_companies) conveniently provides links to the annual reports for these companies). In the “reports” column, find the most recent Annual Report, sometimes called a Form 10-K or just “10-K”). In a paper (you might find this article about how to read an annual report (https://www.wikihow.com/Read-an-Annual-Report) helpful for reading an annual report:
- Identify background information on the company, including the company name, ticker (stock) symbol, GICS Sector, and GICS Sub Industry.
- Summarize the products the company produces and sells, and who their target customers are.
- Describe factors that could shift the demand curve for the company’s product(s) (see the risk factors discussed in the K-10).
- Describe factors that could shift the supply curve for the company’s product(s) (see the risk factors discussed in the K-10).
- Describe whether the company’s product(s) would be expected to have an elastic demand or inelastic demand.
- Discuss the firm’s profitability with an explanation of the difference between accounting profit and economic profit.
- Examine the costs the company incurs and discuss whether the majority of costs are fixed or variable in nature.
- Describe the market structure that best describes the market the firm is in.
- Analyze how the market structure affects the profitability and pricing power of the firm.
- Include at least five scholarly references in addition to the course textbook
(Mankiw, N.G. (2018). Principles of microeconomics – 8th ed. Stamford, CT: Cengage Learning).
Sources such as The Balance, EconomicsHelp.org, Investopedia, and other help websites are not acceptable.