Question

Howard, an analyst with Big Texas Company, has been asked to estimate how many of the company's oil drilling rigs will sell during the last quarter of the current year based on doubling the current marketing efforts. Howard has asked the company executives what they think the likely sales will be, he has surveyed buyers and sales personnel, developed a time-series analysis, and done correlation analysis. Which of the following most accurately describes what Howard has been asked to do?

1) Conduct market research to determine the potential sales of oil drilling rigs
2) Develop a marketing strategy to increase the sales of oil drilling rigs
3) Estimate the number of oil drilling rigs that will be sold based on increased marketing efforts
4) Analyze the correlation between marketing efforts and sales of oil drilling rigs

Answer 1

Howard's task is to forecast sales of oil drilling rigs due to increased marketing efforts, through methods like expert opinions, surveys, and data analysis. This involves estimating effects on the equilibrium of wages and worker quantity in the oil industry using specific hypothetical market changes.

Step-by-step explanation:

Howard has been asked to estimate the number of oil drilling rigs that will be sold based on increased marketing efforts. This task involves an analysis that includes soliciting expert opinions, conducting surveys, performing a time-series analysis, and examining correlations between marketing activities and sales data. The purpose of these analyses is not to develop a new strategy or perform general market research, but specifically to forecast potential sales given a hypothetical doubling of marketing efforts.

To further illustrate how market conditions can affect the equilibrium wage and quantity of oil workers, we can consider several scenarios:

• If the price of oil rises, demand for oil workers increases, leading to a higher equilibrium wage and quantity of oil workers.
• In the event of new oil-drilling equipment that requires fewer workers, the demand for oil workers decreases, resulting in a lower equilibrium wage and fewer oil jobs.
• When non-oil companies establish well-paying jobs in Texas, oil workers might leave the oil industry, decreasing the supply of oil workers and potentially increasing the equilibrium wage for those that remain.
• Finally, new, costly government regulations could increase the cost of hiring oil workers, decreasing demand, potentially lowering the quantity of oil workers while possibly affecting wages variably depending on the additional perceived value of safety measures.