7/9/19 Step 1 the Skills Gap analysis can be a usefultool in both the short run and the longer run. Keep it handy to trackyour own progress. And, honest and thoughtful self-assessment will assistyou in forming your career development.

Steps 2 (supply and demand) and 3 (Profit maximization):please complete step 2 and resubmit in a single excel file along with step3. You will need to take another look at Step 3. The elasticitycomputations are all incorrect. Use excel to perform the computationsrather than simply typing in numbers. For Q6 the computations for MR andMC need to be more precise (4 decimal points). There will be a preciseprice where MR is exactly equal to MC.

Elaborate on your answers. Getting the numberscorrect is the first task. Explaining them is how you can add value toyour work (i.e. the EP versus MP difference). In Step 3, for example, Q7is a good place to elaborate. Why is profit maximized when MR = MC?Would that concept work in real practice at this station? Can the stationmanage pricing such that MR will equal MC? How might competitioninterrupt the goal to match MR and MC? I.e., just getting the correctanswers to these steps is what is required for MP.

7/17/19 Revised Step 2 (demand and supply): Submitonly one spreadsheet with all tabs completed.

Q1: the answer can be read from the graph.So, your computation is off a bit. Wonder why? Can you figure outthe discrepancy?

Q2: similar error. Look at the intersectionon the graph. That price and quantify is the equilibrium price andquantity.

For both Q1 and Q2, additional commentary is inorder. What might cause a shift in demand? Shifts in demand are dueto factors other than price.

Response to Q3 is limited.

Step 3: Q1: the computation of percentagechange in quantify and price is incorrect. The denominator should be theaverage that was computed not the amount on line 25.

The revenue change is incorrectly computed. Use therevenue amounts in cells N37 and N38.

Q2: has the same errors in computing the % change inquantify and price.

Q3: same error as Q2.

Q6: The prices used to computerevenue for 4,001, 4,401, 4,801, and 5,201 are incorrectly computed. Lookat how the price was computed in cell M102 and apply the same rationale to theprices for the other volumes. The price change is not 1/400^thits 1400^thof .01.

These steps need more work before the project can becompleted.

Step 5: The Executive Summary will need to be revise.Both steps should be incorporated into the reports; use data from the study tosupport comments and recommendations. Tables and charts are an efficienttool to present data and improve the visual appeal of your summary. Datadrives decisions, so support comments with data.

7/25/19 Second Revision to Steps 2 (supply and demand)and 3 Profit maximization): Step 2: Q1: Read the numbers onthe graph for the solution. Your math computation is not correct.Since you know the solution from reading the graph you would work at the mathwith that solution in mind. The math is not needed for thisquestion. However, discussion explaining the ideal of price and quantityequilibrium is appropriate.

Q2: Again, the graph exhibits the correct price andquantify equilibrium. In addition, there is a shift in demand resultingin a new price and quantity equilibrium. Shifts in demand are due tofactors other than price. What might such a factor be that leads to a shiftin demand?

Q3: What would cause a surplus in oil to becomezero? OPEC certainly could choose to reduce production, but wouldn’tother oil producers take up the slack?

Your responses to these questions appears as though youare addressing an earlier version of this step. Steps changeregularly. So will the solutions.

Step 3 (profit maximization): Q1: computationof elasticity is not 32.216. You have the percentage change in quantifycorrect but the % change in price is incorrect. The prices are not 2.75and 2.76, they are 2.749 and 2.759. The precision matters. So theaverage is not 2.7545 but rather 2.754. Small difference but itwill result in a slightly different number for elasticity.

Q2 and Q3 are fine. Good job.

Step 5: Executive Summary: The background forExxon – earnings and cash flow – is not relevant to this work. Theinformation on different pricing strategies is of interest. The reportmust focus on the work in Steps 2 and 3. The report should communicatethe findings of that work – so you must incorporate the data from Steps 2 and3. Otherwise, what would be the purpose of the work?

You need to revise Step 2, small correction to Step 3,and revise the ES to report on the results of the work in Steps 2 and 3.Include explanations of equilibrium price and quantify, price elasticity ofdemand at the local station, and recommended price at which marginal revenueequals marginal cost. Recommendation should be limited to the workperformed in Steps 2 and 3. References should be cited to the extent theyare related to the work in steps 2 and 3.

7/30/19 Third Revised Steps 2 (supply and demand) and 3(profit maximization):

Step 2 (supply and demand): Q1 the equilibriumprice and quantity are correct. Q2: The equilibrium price andquantify are incorrect. You did not looked at the graph to seen the shift indemand. What might cause a “shift” in demand as opposed to a change indemand?

Q3: The question does not pertain to the economicmodel that describes the oil industry.

Step 3 (profit maximization): Most of the numbersare correct. It does not appear that you are taking the time to reviewthe feedback to improve your work.

Step 5(Executive summary): The purposes of thereport are outside the scope of the work completed in steps 2 and 3 as well asthe discussion in Step 4. The “mechanisms for reducing costs”, andsuggestions for improving revenue were topics covered in earlier versions ofthis project. The project change over time so you cannot rely on previouswork to complete this semester’s projects. Methods: there were nofinancial statement used as primary material in this project.

Your summary does not address equilibrium prices andquantities nor does it address elasticity per step 3. Use the data fromsteps 2 and 3.

One more opportunity to revise this project. First,correct response to Q2 in Step 2. Second, correct computation ofelasticity per question 2 in Step 3 (see previous feedback). Third,revise the Executive Summary to incorporate the data from both steps 2 and 3and confine the focus of the report to the content of Steps 2 and 3 and thediscussion in Step 4. Do not rely of previous versions of this project tocomplete Steps 2, 3, 4 or 5.