COURSE OVERVIEW: This class will review various ways in which microeconomic principles and quantitative tools can be used to aid managers in making sound decisions. Topics include forecasting consumer demand, production and cost analysis, optimal pricing and production decisions, sensitivity analysis, and capital budgeting.
COURSE OBJECTIVES: Upon completion of this course, you will:
Identify and discuss the six step model of decision making.
Identify how the firm’s profit maximizing level of output is determined including the optimal condition in terms of the basic components, marginal revenue and marginal cost.
Define a multivariable demand function and identify its purposes.
Explain the relationship between price elasticity of demand and revenue.
Discuss how a firm can maximize its profit by using optimal markup pricing and price discrimination.
Keat, Young & Erfle (2014). Managerial Economics, 7/e Prentice Hall ISBN-13: 9780133020267