Purpose: The purpose of this assignment is to familiarize you with the various costs of production and to practice writing a professional letter.
Skills: This assignment will help improve your communication and professional writing skills and understand the different short run costs of production.
Knowledge: This assignment will sharpen your understanding of the various economic costs of production, the difference between accounting and economic costs, as well as the concepts of diminishing marginal returns and economies of scale.
Task: Please draft the following information into a formal, professional letter that you are sending to your boss or to your local venture capitalist to try and convince them to invest in your business. Think Shark TankLinks to an external site. if you have watched that program. You can visit the Purdue Writing LabLinks to an external site. for a sample business letter. Put your letter on Letterhead (you can find letterhead templates in Microsoft Word and I’m sure Google Office has them, too).
Think of a business you may be interested in starting and explain the following in the body of your letter to the Sharks (venture capitalists) (assume the venture capitalist knows nothing about business or economics):
1. What specific resources (land, labor, capital, entrepreneurship) you will need to acquire to operate this business. 2. Explain the difference between explicit and implicit costs and which of your resources are implicit costs. 3. Explain the difference between fixed and variable costs for this business. 4. Explain which of the resources you need are fixed and which are variable resources. 5. Explain how this business could experience diminishing marginal returns in the short run. 6. Explain whether the business will experience economies of scale.
Criteria for Success
· Type the assignment as a professional letter on letterhead.
· Include salutations, date, recipient address, etc.
· Make sure your assignment is at least one page (250+ words long) and includes detailed explanations and examples.
· Use complete sentences.
· Use professional grammar and punctuation– remember, you are trying to persuade someone to invest in your business.
· Avoid “text” or “twitter speak” when corresponding.
· Fancy it up by using letterhead and make it look as professional and visually appealing as possible.
· Do your own work in the class. The use of AI (including Grammarly) or cheating websites is not allowed in this course. Students suspected of academic dishonesty will earn a score of zero on this assignment.
· Be sure to cite any outside resources you use to complete this assignment.