Business Case Studies, Microeconomics Case Study, A Pay Package, Study of Demand and Supply

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Microeconomics Case Study

Case Title:

Executive Pay Package: A Study of Demand and Supply

Publication Month and Year :  June 2009

Authors:  Hepsi Swarna & Akshaya Kumar Jena

Industry: Not Applicable

Region: Global

Case Code: ME0022

Teaching Note:  Available

Structured Assignment:  Available


The case study is meant to investigate whether equilibrium price of a good or service is born of the interplay between market demand and supply or other factors have a bearing on it. Revolving around the pay compensation of the US CEOs, the case is all set to prove that market forces determine the equilibrium pay package of the executives – the price for their highly skilled service. However, dissenting voices see a conspiracy in the much-hyped scarcity of this rarefied talent. The case leaves open the factual position for the reader to see and take his stand.

Pedagogical Objectives:

  • To understand the concept of market equilibrium
  • To analyse how change in demand affects the equilibrium price and quantity
  • To understand how change in supply affects equilibrium price and quantity.

Keywords : Demand and Supply Curves, Law of Demand and Law of Supply, Demand and Supply Factors, Equilibrium of Demand and Supply, Demand for Executives, Supply of Executives, Executive Compensation, Price Determination, Managerial Economics, Microeconomics, Economics for Business, Business Economics, Economics for Managers, Paul Samuelson

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