Managerial Economics For Mba

Lecture notes

Managerial Economics
B ECON 300

Lucas Perin (lmperin@uw.edu)

Managers, Profits, marketplaces
Overall goal of managers: increase profits ( ) account profits: Total Revenues Explicit be Economic profits: Total Revenues Explicit Costs unspoken Costs = Accounting Profits Implicit Costs Accounting profits usually overstate economic profits (but gather in sure you check the baseball example in the book) opportunity Cost: value of next best foregone choice Explicit Costs (not owner supplied) Cost of resources purchased in the securities industry, taxes Leases compensation Capital plant, machinery, equipment Implicit Costs Value of owner-supplied resources - Value of sequence of owner-manager - Forgone returns on owners equity capital - probability cost of using owned equipment, plant, machinery

Market structure: market characteristics that determine the economic environment in which a quick operates. Characteristics: ? ? ? sum up and size of firms (size refers to % of industry output supplied) Degree of harvest-tide differentiation Barriers to entry (high vs. low/no barriers to entry)

Market great role: a firm is said to have market power when it can raise the equipment casualty of its output without losing all of its sales.



monetary value taker: firm in the industry take the market price for their output as given: must charge the identical market price as everyone else or demand pass on drop nearly to zero. The price-taking firm faces a perfectly viscoelastic (horizontal) firm demand curve. Price setter: a price setting firm has any(prenominal) degree of market power, i.e., some ability of increasing price without losing all sales. The firm faces a downward sloping demand curve.

Perfect Competition

Monopolistic Competition

Oligopoly

Monopoly

Market Power

No market power

High degree of market power

Number and Size

Large # of blue firms supplying small % of output No product differentiation/ homogeneous Low barriers to entry

Large # of small firms supplying small % of output...If you want to get a rise essay, order it on our website: Orderessay



If you want to get a full essay, wisit our page: write my essay .