The supply curve of a single firm under perfect competition is that portion of the MC curve
above the minimum point of the AVC curve. How about the supply curve of the
monopolist? Does the monopolist have a supply curve? Discuss with graphs
SHORTRUNSUPPLY

ECF2731/ECF5927 Managerial Economics
Lecture 2: Economic Optimization - Demand & Supply
Outline
Lecture objectives:
1. Economic Optimization Process
I
I
I
Revenue Relations
Cost Relations
Profit Relations
2. Demand & Supply
I
I
I
I
Demand
Supply
Market Eq

ECF2731/ECF5927 Managerial Economics
Lecture 10: Game Theory
1 / 28
Outline
Lecture objectives:
I
Game Theory Introduction
I
Prisoners Dilemma
I
Nash Equilibrium
I
Infinitely Repeated Games
I
Finitely Repeated Games
Unit objectives:
I
Understand and recog

ECF2731/5927 Managerial Economics
P2.7
SOLUTION
A.
Set MR = MC and solve for Q to find the profit-maximizing activity level:
MR = MC
$1,500 = $500 + $0.01Q
0.01Q = $1,000
Q = 100,000
This is a profit maximum because profits are decreasing for Q > 100,000.

ECF2731/5927 Managerial Economics
Solutions - Tutorial 3
P3.10
SOLUTION
A.
When quantity is expressed as a function of price, the demand curve for
Eye-de-ho Potatoes is:
QD = -1,450 - 25P + 12.5PW + 0.2Y
= -1,450 - 25P + 12.5($4) + 0.1($15,000)
QD = 100 -

ECF2731Managerial Economics
Solutions - Tutorial 4
Based on Lecture 4
A.
B.
C.
P4.8
SOLUTION
A.
EI =
Q I2 + I1
I Q2 + Q1
50 - 30
$58,500 + $55,500
$58,500 - $55,500
50 + 30
= 9.5
=
B.
Without a price increase, sales this year would total 50 million unit

ECF2731Managerial Economics
Based on Lecture 2
P2.7
SOLUTION
A.
Set MR = MC and solve for Q to find the profit-maximizing activity level:
MR = MC
$1,500 = $500 + $0.01Q
0.01Q = $1,000
Q = 100,000
This is a profit maximum because profits are decreasing for

ECF2731/5927 Managerial Economics
Solutions - Tutorial 6
P11.4
SOLUTION
A.
The market supply curve is given by the equation
QS = -10 + 2P
or, solving for price,
2P = 10 + QS
P = $5 + $0.5QS
The market demand curve is given by the equation
QD = 320 - 4P
or

ECF2731Managerial Economics
Solutions - Tutorial 3
P3.9
A.
SOLUTION
Each company will supply output to the point where MR = MC. Because P = MR in
this market, the supply curve for each firm can be written with price as a function of
quantity as:
Cornell
M

ECF2731Managerial Economics
Solutions - Tutorial 5
Based on Lecture 5
P4.8
SOLUTION
A.
EI =
Q I2 + I1
I Q2 + Q1
50 - 30
$58,500 + $55,500
$58,500 - $55,500
50 + 30
= 9.5
=
B.
Without a price increase, sales this year would total 50 million units. Theref

Managerial Economics
SOLUTION - Tutorial 9
Solve Problems Chapter 14: 14.3, 14.5
P14.3
SOLUTION
A.
Yes, the dominant strategy for firm A is up. Notice that if firm B chooses left, the
highest payoff of $5 million can be achieved if Firm A chooses up. On t

ECF2731Managerial Economics
Solutions - Tutorial 4
Based on Lecture 4
Based on Lecture 4 P4.4 with small adaptation
Budget Constraints, Income and Substitution Effect. Holding all else equal, indicate how each of the
following changes would
a) Affect the

1.) According to the five forces of the Porter's model, the organization of an industry can be
analyzed in terms of its structure, conduct and performance. Discuss
ANSWER: the structure of an industry refers to factor such as technology, concertation and

ECF2731/ECF5927 Managerial Economics
Lecture 11: Risk Analysis
1 / 23
Outline
Lecture objectives:
I
Concepts of Risk and Uncertainty
I
Probability Concepts
I
Utility Theory and Risk Analysis
I
Adjusting the Valuation Model for Risk
Unit objectives:
I Unde