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MANAGERIAL

ECONOMICS

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Market Forces: Demand and Supply

I. Market Demand Curve

The Demand Function

Determinants of Demand

Consumer Surplus

II. Market Supply CurveThe Supply Function

Supply Shifters

Producer Surplus

III. Market EquilibriumIV. Price Restrictions

V. Comparative Statistics

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The Theory of Individual

Behavior I. Consumer BehaviorIndifference Curve Analysis

Consumer Preference Ordering

II. Constraints

The Budget Constraint

Changes in Income

Changes in Prices

III. Consumer Equilibrium IV. Indifference Curve Analysis & Demand Curves

Individual Demand

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The Production Process and Costs

I. Production Analysis

Total Product, Marginal Product, Average Product

Isoquants

Isocosts

Cost Minimization II. Cost Analysis

Total Cost, Variable Cost, Fixed Costs

Cubic Cost Function

Cost Relations

III. Multi-Product Cost Functions

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Managing in Competitive,

Monopolistic, and MonopolisticallyCompetitive Markets I. Perfect Competition

Characteristics and profit outlook.

Effect of new entrants. II. Monopolies

Sources of monopoly power.

Maximizing monopoly profits.

Pros and cons. III. Monopolistic Competition

Profit maximization.

Long run equilibrium.

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Basic Oligopoly Models

I. Conditions for Oligopoly?

II. Role of Strategic Interdependence

III. Profit Maximization in Four Oligopoly

Settings:Sweezy (Kinked-Demand) Model

Cournot Model

Stackelberg Model

Bertrand Model

IV. Contestable Markets

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Pricing Strategies for Firms with

Market PowerI. Basic Pricing Strategies

Monopoly & Monopolistic Competition

Cournot Oligopoly

II. Extracting Consumer Surplus

Price DiscriminationTwo-Part PricingBlock Pricing Commodity Bundling

III. Pricing for Special Cost and Demand Structures

Peak-Load Pricing Price Matching

Cross Subsidies Brand LoyaltyTransfer Pricing Randomized Pricing

IV. Pricing in Markets with Intense Price Competition

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Chapter 13

Advanced Topics in Business Strategy

I. Limit Pricing to Prevent Entry

II. Predatory Pricing to Lessen Competition

III. Raising Rivals Costs to Lessen CompetitionIV. Price Discrimination as a Strategic Tool

V. Changing the Timing of Decisions

VI. Penetration Pricing to Overcome NetworkEffects

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A Managers Guide to

Government in the Marketplace

I. Market Failure

Market Power

Externalities

Public Goods

Incomplete Information

II. Rent Seeking

III. Government Policy and International Markets

QuotasTariffs

Regulations

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Reference:

Michael R. Baye, Managerial Economics andBusiness Strategy, The McGraw-Hill, Inc.

5e (2006) or more recent edition.