University of La Verne COLLEGE OF BUSINESS & PUBLIC MANAGEMENT BUS 525 ECONOMICS OF THE FIRM
Spring 2012
Midterm Review Weights (% of total) I. In your opinion, what should be the main focus of Managerial Economics/ Economics of the Firm? What is the impo
ch01
Student:
1.
The higher the interest rate:
A. the greater the present value of a future amount.
B. the smaller the present value of a future amount.
C. the greater the level of inflation.
D. None of the statements associated with this question are cor
Managerial Economics and Business Strategy
. _ . . 9
At what level of the control variable are net benefits ma‘iopluzedt.at this
Ct:- What is the relation between marginal benefit and margin cos I
level of the control variable? I
7. It is estimated that o
THE FIRMS BASIC PROFIT
MAXIMIZATION PROBLEM
What Quantity of Output should the Firm
Produce and Sell and at What Price?
The Answer depends on Revenue and
Cost Predictions.
The Solution is Found using Marginal Analysis.
Expand an Activity if and only if
th
Decision Making Is At The Heart of Most Individual,
Business, & Government Problems
Important Decisions Warrant Serious Analysis
Text Topics
1 Profit Analysis (Chapters 2-6)
2 Market Structure & Competitive Strategy
(Chapters 7-10)
3 Regulation and Public
DETERMINANTS OF DEMAND
A firms quantity of sales depends
on multiple economic factors.
For instance, an airlines seat demand
might be described by the equation:
Q = 25 + 3Y + P 2P.
Here, demand depends on:
customer income (Y),
the rivals price (P),
and th
ESTIMATING & FORECASTING DEMAND
An airline seeks to estimate the
demand relationship between
seats sold (Q) and average fare (P):
Q = a + bP,
based on 16 past observations
of P & Q.
Chapter 4
slide 1
Here, the best linear equation
turns out to be:
Q = 479
Chapter 7
slide 1
PERFECT COMPETITION
Market Structure is
Important for Two Reasons
It influences firm Behavior & Profitability
It Influences Economic Performance
Which Markets Perform Well
Which should be Regulated
We divide markets according to:
Number
Pure Monopoly vs
Perfect Competition
Chapter 8
slide 1
QM < Q C
PM > P C
Price
M
>
C
=0
Industry
Demand
M
PM
MR
E
PC
QM
QC
Unit Cost
Output
PURE MONOPOLY
8.2
Examples:
Entry Barriers:
Price and Output are
determined by MR = MC.
Industry
Demand
MC
AC
PM
MR
Chapter 9
slide 1
OLIGOPOLY
A Small Number of Large Firms
Dominate the Market.
The firms fortunes are interdependent.
Each firms actions affect the profits of
its few rivals.
Porters Five-Forces
Model
Supplier
Power
Entry
Internal
Rivalry
Substitutes &
Co
GAME THEORY & COMPETITIVE STRATEGY
Sizing up competitive situations
according to:
1. Number of Competitors
2. The Degree of Conflict or Cooperation
3. The Opportunity for Communication
4. Single or Repeated Competition
5. The Amount of Information
Availab
Chapter 1: Answers to Questions and Problems
3.
a.
Net benefits are N Q
b.
Net benefits when Q
N 5
50
20 5
20 Q 5Q 2 .
1 are N 1 50 20 5 65 and when Q
50
5 they are
2
55
25 .
c. Marginal net benefits are MNB Q
20 10Q .
d. Marginal net benefits when Q 1 ar
ch02 A2
Student:
1.
In least-squares regression, independent variables are not included in the computations of the slope and
intercept.
True False
2.
Least-squares regression selects the values for the intercept and slope of a straight line that minimize
University of La Verne
College of Business & Public Management
BUS 525 - Course Syllabus Spring 2015
I. Course Designation
BUS 525
Economics of the Firm
Saturday Classes
Instructor: Ruby Chou
Email: rchou@laverne.edu
II. Relationship To Specific Program
B
Economics 101
Fall 2012
Dan Friedman
UCSC
Problem Set #2
Due in class Tuesday October 16.
Part 1:
Look over all the questions and problems in Baye Chapters 5-6. Write out and turn in
your solutions to:
Problems 12, 18, 19 of Chapter 5; and
Problems 11, 15
Equity Research Report
Student Investment
Management
July 2013
Recommendation:
BUY
Price Target:
Current Price (July 16):
Upside Potential:
Projected Return (incl. div yield.):
62.49$
50.23$
24.4%
26.0%
A
N
F
Martin Perrier
614.648.2380
Perrier_4@fisher.o
BUS 525 - Online Assignment
Due Date/Time: July 12 by 5:00pm
Grade: 5 points each part = total 20 points
Submit by email to rchou@laverne.edu
(Graphs can be submitted in pdf or jpg file format)
* I will email you the answer key at 5pm.
No late submission
EcBu 525 Research Report:
Company Case Study and Industry Analysis
Report Due: 5:00 pm, Sat., 8/9/2014 (submit by email to rchou@laverne.edu)
Grade: This is an individual research paper.
*Report length should be approximately 6 pages (typed, double-spaced
Study Guide for EcBu 525 Final
Date: . ' _ "-r'
Time: (in class)
* No Make-Up Final Exam! ll
* . . multiple choice questions
* Bring a #2 pencil and calculator
* a 3 x 5 index card is allowed for formulas dining exam
Toms (comprehensive covers all
University of La Verne
College of Business & Public Management
BUS 525 - Course Syllabus Summer 2014
I. Course Designation
BUS 525
Economics of the Firm
Saturday Classes (CRN 1151)
Instructor: Ruby Chou
Email: rchou@laverne.edu
II. Relationship To Specifi
Ssu-Wei, Chang
University of La Verne
COLLEGE OF BUSINESS & PUBLIC MANAGEMENT
BUS 525 ECONOMICS OF THE FIRM
Summer 2012
Midterm Review
Weights (% of total)
I.
In your opinion, what should be the main focus of Managerial Economics/
Economics of the Firm? W
Managerial Economics & Business Strategy
Homework 1
Chapter 1
8. Jaynet spends $30,000 per year on painting supplies and storage space. She
recently received two job offers from a famous marketing firmone offer was for
$110,000 per year, and the other was
MC=20Q=2 fixed fee=100-20*2=160
Q*P-Q*MC=120-40=80
a . 25*3*1000+50*3*1000=75000+150000=225000
b. (60*1000+140*1000)=20000
c. 110*3*1000=330000
d. 175*1000+60+1000+140*1000=375000
Firms with market power face a downward-sloping demand.
Implication: there
Chapter 10: Market Power: Monopoly and Monopsony
CHAPTER 10
MARKET POWER: MONOPOLY AND MONOPSONY
EXERCISES
3. A monopolist firm faces a demand with constant elasticity of -2.0. It has a constant
marginal cost of $20 per unit and sets a price to maximize p
Gas Price and its effect on Automobile
Industry
Group 7
February 9, 2015
Fangzheng Liu
Hassan Alqahtani
Siddharth Dakoria
Yue Yuan
Agenda
Introduction.
Oil
Price over the years.
Automobile industry in United States.
Hybrid car analysis.
Conclusion
Introdu
Economics 101
Fall 2012
Dan Friedman
UCSC
Midterm Exam
Rules: Closed book, no notes other than the official list of formulas distributed in class.
No electronic devices other than basic calculators. 105 minutes. Write your answers
clearly on 8x11 paper in