Sample interview questions: Can you explain your approach to analyzing the economic impact of changing energy prices on businesses?
Sample answer:
Analytical Approach to Assessing Economic Impact of Energy Price Changes on Businesses
1. Data Collection and Analysis:
- Gather historical and current energy price data to identify trends and volatility.
- Collect business-specific data on energy consumption, costs, and production levels.
- Utilize industry reports and economic databases to supplement internal data.
2. Input-Output Analysis:
- Construct input-output tables to trace the direct and indirect energy inputs used in production.
- Quantify the impact of energy price changes on production costs and profitability.
- Identify the industries and sectors most vulnerable to energy price fluctuations.
3. Elasticity Analysis:
- Estimate the price elasticity of demand for energy and the elasticity of substitution between energy and other inputs.
- Determine how changes in energy prices affect demand for products and services, as well as the ability of businesses to adjust their production processes.
4. Simulation Modeling:
- Develop economic models that simulate the impact of varying energy prices on business revenues, costs, and profitability.
- Use Monte Carlo simulations to account for uncertainty in energy prices and other economic variables. Read full answer