BUSINESS ECONOMICS 545-PROJECT 1-MICROECONOMIC ANALYSIS
KELLER GRADUATE SCHOOL OF MANAGEMENT

Comments from Professor:
Need more content next time. no Elasticity calculation, No profit maximization, minimal on determinants
Abstract
Cindy wants to invest in a new business that involves the installation of solar panels. In order to make an informed decision on this business venture, she will need to review potential profit/loss in the solar panel industry by considering future prospects for this type of business. Cindy also needs to decide whether she will invest her own funds or borrow the money to start the business.

The imminent growth of the solar photovoltaic (PV) industry is almost certain. When observing the rising costs of coal and natural gas prices, the decrease of PV system costs, and the government support of solar technology, the PV market looks to have a significant increase in volume over the next few years. According to SolarBuzz, a website dedicated to Solar Power and Energy, The solar PV industry has reached a critical tipping point, with end-market demand hitting record levels almost every quarter. This growth is being driven by leading module suppliers and project developers that returned to profitability during 2013, and which have now established highly-effective global sales and marketing networks.” (NPD Group, Inc., 2013) The article also states that “demand in Q1’14 will also achieve record-breaking status, as the strongest first-quarter ever seen by the PV industry.” (NPD Group, Inc., 2013)
The cost of production for solar panels has decreased significantly. “The average cost for tier 1 solar photovoltaic manufacturers is expected to fall 6% during 2014, continuing the downward trend set in place since 2008, bringing the overall cost to a record low of $0.20 per watt, according to the latest research from NPD. (NPD Group,