Economics for business policy course final presentation; featuring Disney English for case study analysis purpose.

1. Team MembersTeam Members:
Karen Ning
Frank Yang
Chloe Zhang

2. Background Introduction
• Business Type
• Target Customers
• Sample Selection

3. Business Type
Early Childhood English Language
Training;

4. Business Type
1 Native-English Speaker
+
1 Dual-Language Teacher;

5. Business Type
3D Interactive SMART Board Technology;

6. Business Type
Immersive & Fun Story-Telling Teaching
Style.

7. Target Customers
Children in China, aged 2-12;
Mid-class & High-income Families;
High-educated Families;
People Tend to Study Abroad;
Career-required.

8. Sample Selection
Source: internal company data;
Object: 1 specific learning center in
Beijing;
Range: first 3 years as a start-up center;

9. Supply Curve
S = g (Px, Py, Pl, Tc, F)
Price of substitutes ↑
Supply curve →
Price of Input ↑
Supply curve ←
Technology ↑
Supply curve →
No. of Firms ↑
Supply curve →

10. Demand Curve
Qx = f (Px, Py, N, I, T) Price of substitutes ↑
Demand curve →
Population of customers ↑
Demand curve →
Disposable Income ↑
Demand curve →
Taste ↑
Demand curve →

11. Demand Supply Function
Year 2011 Q: 406 P: $2003.08
Year 2012 Q: 754 P: $2159.23
Year 2013 Q: 1085 P: $2284.62

12. Cost
Contains TWO parts:
1. Fixed Cost;
2. Variable Cost.

13. Fixed Cost
 Assume:
• All the costs are fixed costs, except for the salary costs of
those who offer classes to students;
Reasons for doing this.
 Explain:
• The difference between the real situation and what we
assumed;
eg: classes decoration and enough equipment for 10
classes.

14. Fixed Cost
Year Monthly
Rental $184,615.38 $15,384.62
Ads $9,230.77 $769.23
Utilities $3,692.31 $307.69
Decoration $23,076.92 $1,923.08
Other Staff’s Salary $73,846.15 $6,153.85
Equipment $55,384.62 $4,615.38
Total $349,846.15 $29,153.85

15. Variable Cost

16. Curve & Tendency (Monthly)

17. P=20.144*Q+31,650
Marginal Cost = $20.144
Monthly Marginal Revenue
$2,285/12=$190
Only a few firms are in this new-born
business.
They have greater leverage on the price.

18. Production & Market
Competition

19. Production & Marginal Product
• When add one more labor, how much the
output increases;
• It’s different from what we’ve learned
theoretically:
– the language instructors are more
independent (Compare with the manufacture
industry).

20. Early Childhood English
Language Training

21. Monopolistic Competition
All firms
produce similar
yet not perfectly
substitutable
products
All firms are
able to enter the
industry if the
profits are
attractive.
All firms are
profit
maximizers
All firms have
some market
power, which
means none are
price takers

22. Market in Different Periods
• Initially:
– MR ＞ MC (Largely);
– Barrier of Market Entry: LOW;
– Market Type: New.
• Gradually:
– MC ↑, MR ↓.
– More company get involved;
– # of competition ↑.

23. Thank you!Thank you!