Department of Management, Marketing & Public Administration
0302150 Introduction to Business
Assignment # 1- Total 10 marks.
Student’s Name_______________________________I.D. #____________________
Question # 1 (2.5 Marks)
Do some research on small business in UAE using different sources (library, Internet, and Published articles). Then discusses how important is small business to the UAE economy?
Question # 2 (2.5 Marks): Solve the Dilemma
Mrs. Acres Homemade Pies
Shelly Acres, whose grandmother gave her a family recipe for making pies, loved to cook so she decided to start a business she called Mrs. Acres Home-made Pies. The company produced specialty pies and sells them in local supermarkets and select family restaurants. In each of the first six months, Shelly and three part-time employees sold 2,000 pies for $4.50 each, netting $1.50 profit per pie. The pies were quite successful and Shelly could not keep up with demand. The company’s success results from a quality product and productive employees who are motivated by incentives and who enjoy being part of a successful new business.
To meet demand, Shelly expanded operations, borrowing money and increasing staff to four full-time employees. Production and sales increased to 8,000 pies per month, and profits soared to $12,000 per month. However, demand for Mrs. Acres Homemade Pies continues to accelerate beyond what Shelly can supply. She has several options. (1) maintain current production levels and raise prices; (2) expand the facility and staff while maintaining the current price; or (3) contract the production of the pies to a national restaurant chain, giving Shelly a percentage of profits with minimal involvement.
1- Define supply, demand, and equilibrium price, explain and demonstrate the relationship between supply and demand for Mrs. Acres Homemade Pies. [1 mark]
2- What challenges does Shelly face as she considers the