You work in the Economic Planning Department of a consultants, Econ Consult. You have been asked by the Managing Director to work in a small group with 3 other people to write a response to the following enquiry.

Company Name : We need to know
Contact Name : Dr J Jack
Company Address : Room 101, 77 Old Road, Bath, NW29

The managers of the company are evaluating different options for output and price decisions. They have decided to either maximise sales or profit.

Could you discuss the advantages for individual stakeholders within the firm (managers, shareholders, workers, customers) of both policies.

The input conditions are;

• Price Elasticity of Demand = 1.0
• Fixed Costs (£) = 80
• Variable Costs (£) = 20
• Desired Profit Level (£) = 50

Your findings need to be presented in two ways, the first will be as a written report with covering letter, second will be as a question and answer session on the content of the report.

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