Assignment Instructions

A Business Report.

1. Stateme nt of the Case Study
Teena’s Business Venture
Teena is an art teacher but a year ago, she decided to take a year’s leave without pay to start a new business. She became the owner of a coffee shop in Al Barsha. She is selling coffee and sandwiches. She has leased two coffee machines at a cost of AED 1600 per month. The monthly rent for the café is AED 5000. Her salary as a teacher was AED 8000 per month. Teena hired two university students to help her, paying each student a monthly salary of AED 3000. Her monthly ex- penditure on coffee beans and other ingredients is AED 4000 and AED1000 on other expenditures (electricity, cleaning, etc.).
Teena faces the following demand curves for coffee and sandwiches.
Demand curve for coffee per week Qd = 200 – 2 x P
Demand curve for sandwiches perweek Qd = 400 – 12 x P
Teena has no knowledge of elementary microeconomics. She does not know how to calculate the elasticity of demand. She is currently charging a price of AED 20.00 per unit for both coffee and sandwiches, and is thinking about increasing the price of both to AED 25.00 per unit.
A friend of Teena’s was an undergraduate business student who told her that for her business to be worthwhile she should be making at least normal profit. Teena was curious about the profit she made last month and consulted an accountant and an economist. She provided all the above- mentioned information to the accountant and the economist. To her surprise, they come up with different values for the total profit before tax. This was very disturbing and confusing for Teena and she decided to consult an ECON 802 student to organize her thinking.
Additional Notes:
The demand equations are for weekly demand of coffee and sandwiches. The price that is being charged is AED 20 per cup of coffee and AED 20 per sandwich. The monthly economic profit and accounting profit should be calculated. To calculate the monthly revenue, multiply the quantity estimated by the demand equations by 4.

2.Your tasks
You have to write a Business Report where you address the following five (5) tasks:
Task 1
Complete the table below
Table 1
What is the dirham value of the monthly Economic profit and Accounting profit in this case study? (Fill in the blanks in Table 2). (Computations to arrive at the required result must be shown in the Appendix) Why are the two values different? (For the revenue, multiply the weekly quantity x 4 to get the monthly quantity).

Total Revenue
Coffee AED 20
Sandwiches AED 20

Table 2
Task 2
Explain to Teena the meaning of “normal profit”. Does she need to exit the mar- ket if she is earning a normal profit?
Accounting Profit
Economic Profit
Task 3
Calculate the elasticity of demand for both coffee and sandwiches when the price changes from AED20 to AED25. Fill in the blanks of Table 2. Calculations must be in the Appendix.
Table 3
Price Change Value of Price Elasticity of Demand

Price change of coffee fromAED20 to AED25

Price change of sandwiches fromAED20 to AED25

Task 4
Explain the concept of price elasticity of demand to Teena and advise her about her pricing strategy for both coffee and sandwiches. Do you think it is a good idea for her to increase the price of both items from AED 20 to AED 25? Justify your an- swer.
Task 5
Given the information provided describe the type of market Teena’s coffee shop is operating in. Make sure you explain the features and the behaviour of firms in this type of market.


The post A Business Report first appeared on Bestchoice Writers.

A Business Report

Calculate Price

Price (USD)

Why Choose Us For Your Assignment?


We value all our customers' privacy. For that reason, all information stays private and confidential and will never be shared with third parties.


With our service you will never miss a deadline. We use strict follow-ups with our writers to ensure that all papers are submitted on time.


We have no tolerance for plagiarism. All papers go through thorough checking to ensure that no assignments contain plagiarism.

Money Back

You feel unsatisfied with your results? No worries. We offer refunds to our customers if any paper is not written according to the instructions.

Clients Love Us

Client #121678
Client #121678
Read More
This is by far the best I have ever scored in a custom essay. I am surprised the writer handled this assignment so well despite the short notice. I will definitely use your service next time.
Client #21702
Client #21702
Read More
When I was recommended to you by my friends, I wasn't sure you could deliver excellent results for Masters research papers until I submitted my first order. I am all yours now.
Client #20730
Client #20730
Read More
Excellent Services! You are the only assignment helper I can rely on. I have worked with many before and your services are exceptional. I have recommended you to my friends and the results are similar.
Client #20387
Client #20387
Read More
I rarely write reviews online but your services are worth promoting. My paper was so urgent I was sure I was gonna miss the deadline but you turned things around. You are awesome!
Client #20189
Client #20189
Read More
I am a satisfied customer. I know I should have given a 5 star because you deserve it but I will give 4.6 because I almost missed a deadline because of a revision. Luckily it was minor and the writer acted promptly.
Client #20187
Client #20187
Read More
Great paper but there is still some room for improvement. I am impressed by your fast responses and how you tacked my concerns professionally. Thank you for being among the few genuine essay writing service providers.
Client #19783
Client #19783
Read More
I can't thank you enough for being a great part of my college life. I recommended you to two more of my friends. I am sure they will be making their orders soon. I love the fact that you offer free pages for referrals. I will be referring a few more and maybe I won't have to pay for my next two paper, LOL.