Jarred Volek

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Jarred Volek Nicholas Rawlins Christina Merbedon
e
Kurt Lorenz Gillian Pavlek
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TABLE OF CONTENTS
Gillian History/Background Scarce Resources Op
portunity Cost
Jarred Monopoly Monopolistic Competition Oligo
poly
Kurt Supply/Demand Substitutes Factors of Supp
ly/Demand
Elasticity
Christina Profit Maximization Perfect Competiti
on
Two Types of Profit
Nick Budget Constraint Budget Line Benefits of
Employment
Type of Business
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History

• 1902 George Dayton opens Goodfellows in downtown
  Minneapolis.
  
• 1954 J.L. Hudson opens Northland Center in
  Detroit.
  
• 1962 Target becomes a new idea in discount
  stores
  
• 1971 The Dayton Hudson Corporation is formed
  through a merger of the Dayton Corporation and
  the J.L. Hudson Company.
  

• 1979 Target Stores becomes the corporations top
  revenue producer
  
• 1995 Target Stores launches the industrys first
  discount store credit card.
  
• 1998 Revenues Top 30 billion
• 2000 Dayton Hudson Corporation celebrates its
  name change to Target Corporation

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Background
First Target store opened on May 1, 1962 in
Roseville, Minnesota, 1,313 stores in 47 states
136/1,313 are super stores 22 distribution
centers 3 import warehouses Ranked 34th on the f
ortune 500 list Give over 2 million a week to th
e communities it serves
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Scarce Resources

• Less of something freely available from nature
  than we would choose to consume
  
• Land
• Labor
• Capital
• Entrepreneurial Activity

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Land
The physical space on which production takes
place, as well as the natural resources found
beneath or on it
Headquarters Located in Minneapolis, MN Regional
Offices in LA, Dallas, Richmond, Minneapolis,
and Troy
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Labor
The time human beings spend producing goods and
services

• Approximately 192,000 employed

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Capital
Physical capital buildings, machinery, and
equipment Human capital the skills and tr
aining that workers possess

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Entrepreneurial Activity

• Recognizes opportunity and then proceeds to take
  advantage of that opportunity
  

• George Dayton
• J.L. Hudson

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Opportunity Cost

• what you give up versus what you gain
• the value of the best alternative which must be
  given up in order to get something

• item at Target 5-200
• time to shop 1 to 2 hours
• gas money 5.00
• Total opportunity cost 10-205

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Law of Demand

• Inverse relationship
• As price increases, quantity demanded decreases

Decrease in Demand
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Law of Supply

• Direct Relationship
• As the price increases, the quantity supplied
  increases
  

Increase in Supply
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Factors of Supply and Demand

• Supply
• Input Prices
• Number of Sellers
• Expectations of Sellers
• Prices of Alternate Goods
• Technology

• Demand
• Income
• Number of Consumers
• Expectations of Buyers
• Prices of Related Goods
• Tastes

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Price Elasticity of Demand

• Measures how sensitive quantity demanded is to a
  change in price
  
• Determinates of Elasticity
• Availability of Substitutes
• Importance in the Buyers Budget
• Time Period

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Short-Run vs. Long-Run Elasticity

• Short-Run
• Response measured shortly after price change-a
  few months
  
• Some inputs are fixed

• Long-Run
• Response measured in a years time or longer
• All inputs are variable

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Substitutes

• Wal-mart
• Kmart
• Sams club

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Budget Constraint-identifies which combinations
of goods and services the consumer can afford
with a limited budget, at given prices. -For
example, Tommy Target, has a maximum purchase
expenditure of a 150 - Typical DVD 15-Typical
CD 10
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CHANGES IN THE BUDGET LINE
Budget Line
Increase in Income
CDs
CDs
DVDs
DVDs
CDs
CDs
DVDs
DVDs
Decrease in Price of CD
Decrease in Price of DVD
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WHAT TYPE OF BUSINESS FIRM IS TARGET?
CORPORATION
Ownership is divided among those who buys shares
of stock. Each share entitles its owner to a vote
for the board of directors, which in turn hires
the corporations top manager.
Some other types of corporations you are familiar
with are
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THE BENEFITS OF EMPLOYMENT
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Different Types of Profit

• Accounting Profit
• Total revenue total costs
• Economic Profit
• Total revenue ALL costs of production
• Total revenue-( Explicit costs Implicit Costs)

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Targets Profit2003

• Accounting Profit
• 48,163 million- implicit costs (cost of
  sales-wages- general expenses-income taxes)
  
• Final Accounting Profit
• 1,841 million

• Economic Profit
• 48,163 million implicit costs-explicit costs
  (investment forgone-rent forgone-salary forgone)
  

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Profit Maximization

• Every firms key GOAL
• Marginal Revenue Marginal Costs
• Profit Total Revenue- Total Costs

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Perfect Competition

• Large number of buyers and sellers
• Each buys or sells only a tiny fraction of the
  total quantity in the market.
  
• Sellers offer a standardized product
• Sellers can easily enter into or exit from the
  market
  

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Targets Market Structure

• Competitive Market??
• NO
• Why?
• Few Competitors
• Some barriers exist

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Monopoly

• Target is not a pure monopoly.
• Is Target monopolistic in nature?

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Monopolistic Competition

• Many buyers and sellers
• Sellers offer a differentiated product
• Easy entrance and exit

Yes
No
Yes
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Oligopoly

• Few firms producing either a
• Homogeneous or a
• Heterogeneous Product

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Oligopoly

• Target, Wal-Mart, K-Mart, and Costco Wholesale
  make up the Oligopoly
  

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What have you learned today..

• The History of Target
• Scarce Resources
• Opportunity Cost
• Supply/Demand
• Substitutes
• Factors of Supply and Demand
• Elasticity
• Budget Constraint
• Budget Line
• Benefits of Employment
• The Type of Business Target Is
• Profit Maximization
• Perfect Competition
• The Two Types of Profit
• Monopoly
• Monopolistic Competition
• Oligopoly

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Keep Your Eye On The Target
GOOD LUCK ON YOUR FINALS