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Managerial Economics 40
Managerial Economics 10 Examples Table 2: Estimating Industry Supply for New Automobiles
(2) Estimated Value for
Variable During the
(3) Average Price for New Cars (P) ($) 2000 $25,000 50,000,000 Average rice or port tility
Average Price for Sport Utility
Vehicles (Psuv) ($) -400
400 $35,000 -14,000,000
14,000,000 -100,000 $85 -8,500,000 Average Cost of Steel, per Ton (S) ($) -13,750 $800 -11,000,000 Average Cost of Energy Input, per
mcf Natural Gas (E)(4) The Market Supply Function
Industry Versus Firm Supply: A supply function is affected by
prices, prices of other products, advertising, and macroeconomic
Firm supply is affected by these factors and competitive
Industry supply is the sum of firm supply (See Table 2) -125,000 $4 -500,000 -1,000,000 8% -8,000,000 Average Hourly Wage Rate, Including
Fringe Benefits (W) ($) Average Interest Rate (I) (%)
Total Supply (millions of cars) 8,000,000 41
Managerial Economics Estimated
Managerial Economics Sources
Luke M. Froeb and Brian T. McCann, Managerial
Economics: A Problem Solving Approach, 2nd
ThompsonPaul G. Keat and Philip K.Y. Young, Managerial
Economics 5th Edition Prentice Hall 2006
Economics, 5th Edition, Prentice Hall, 2006.
Mark Hirschey, Managerial Economics, 10th Edition,
McConnell and Stanley Brue, Microeconomics, 16th
R. Glenn Hubbard and Anthony P. O'Brien,
Microeconomics,1st edition 2006.
Managerial Economics 11...
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This document was uploaded on 05/18/2012.
- Spring '09