Econ 601- Managerial Economics
Chapter 2- Solved Problems
# 8 in 6th ed and 7 in 7th ed.
a. Equate quantity demanded and quantity supplied to obtain
1
1
1
7 P x = P x . Solve this equation for Px to obtain the equilibrium
2
4
2
price of Px = 10 . The equi
Chapter 9-Exercise # 19 (Sweezy Oligopoly)
PC Connections and CDW are two online retailers that compete in an Internet market for
digital cameras. While the products they sell are similar, the firms attempt to
differentiate themselves through their own po
1)
2)
MARKET STRUCTURE: COURNOT DUOPOLY WITH LINEAR DEMAND AND CONSTANT MARGINAL COST
In the green cells, type each firm's marginal cost for the cost function C(Qi) = ciQi and then PRESS ENTER
Firm 1's marginal cost (c1)
$2.00
Firm 2's marginal cost (c2)
STEPS FOR EXCEL SOLVER FOR COST MINIMIZATION
GENERAL GUIDELINES:
Go to TOOLS and look for the SOLVER. If not found, use the ADD IN command
to add it (Excel Icon, Options, Add-ins, Solver).
Choose min or max or value of circle, depending on the objective
WELCOMING LETTER
Hello Everyone:
Welcome to the 2013 New Year and ECON 330: Managerial Economics for the Winter term.
This is a very interesting course because it combines economic theory with real world
applications. If time allows, we will discuss how f
Managerial Economics
DR. HAMMOUDEH
REGRESSION ANALYSIS
Please refer to pages 92 to 101 in the textbook for more information on regression
analysis.
We will estimate a demand function using linear and log-linear regressions.
Linear Regression: The followin
Chapter 8
Exercises 1- 7
1.
a. MR = 200 4Q and MC = 6Q. Setting MR = MC yields 200 4Q = 6Q. Solving
yields Q = 20 units. The profit-maximizing price is obtained by plugging this into the
demand equation to get P = 200 - 2(20) = $160.
b. Revenues are R = (
Chapter 5 (Different editions of the book)
1.
a.
When K = 16 and L = 16, . Thus, APL = Q/L = 16/16
= When K = 16 and L = 81, . Thus, APL =
24/81 = 8/27.
b. The marginal product of labor is . When L = 16, . When L = 81, . Thus, as the number of
units of la
SUMMARY OUTPUT
Regression Statistics
Multiple R
0.997162
R Square
0.994332
Adjusted R Square
0.99008
Standard Error
0.892017
Observations
8
ANOVA
df
Regression
Residual
Total
SS
MS
3 558.3172 186.1057
4 3.182777 0.795694
7
561.5
Intercept
Price
M (Income)
Econ 601: Managerial Economics
Dr. Shawkat Hammoudeh
Discussion # 2: Mergers in the Baby Food Industry
Questions for Discussion
1. Specify the market shares of the three firms in this industry. Ho much is C3 in this
case?
2. What is the shelf presence in
Case Study # 1: Septa
An application on the price elasticity of Demand
The price elasticity EPD measures the sensitivity of consumers to the % change in the
price. The more sensitive the consumers are to the change in the price, the more elastic
demand is
ECON 601
Dr. Hammoudeh
Case Study 3: Milk Industry & Economies of Scale
Sales Revenue: 1989
$20 billion = 10% of the sales of all farm commodities
Location:
Milk is produced in all the 50 states. Half of the production comes from 5 states- WI, CA,
NY, MI
Chapter 9 # 18 (Stackelberg oligopoly)
TOTAL POINTS = 10 POINTS.
This is a Stackelberg oligopoly because there are a follower (Fiberboard Profit) and a leader
(CompositeBox).
We need first to determine the follower's reaction function.
Set MRf = MCf
Deriv