Managerial Economics

This course provides an overview of economic analysis of firms, markets and government policies. The course is intended to provide the participants with the conceptual framework and tools that they can use to analyze and understand the managerial decision making, the markets and government-policy environment. The participants will learn how to apply the basic principles and managerial economic tools to actual decision - making problems.

Session 1

INTRODUCTION, DEMAND ANALYSIS
The Market Mechanism
Shifts in Supply and Demand
Minimum and Maximum Prices
Consumer behavior
Consumer Preferences
Indifference Curves

Session 2

CONSUMER BEHAVIOUR AND INDIVIDUAL DEMAND
Budget Constraints
The Concept of Utility
Individual Demand
Income and Substitution Effects
Market Demand
The Price Elasticity of Demand
Empirical Estimation of Demand

Session 3

SUPPLY AND PRODUCTION
The Short Run Versus the Long Run
Isoquants
The Theory of Production - the Short Run (The Law of Diminishing Returns)
The Theory of Production - Long Run (Diminishing Returns,
Returns to Scale)
Measuring Production Functions

Session 4

THE COST OF PRODUCTION
Cost in the Short Run
Cost in the Long Run
Long - Run Versus Short - Run Cost Curves
Economies of Scope
Estimating and Predicting Costs

Session 5

COMPETITIVE FIRM: PROFIT MAXIMIZATION – SHORT RUN
Choosing Output in the Short Run
The Competitive Firm’s Short - Run Supply Curve
The Short - Run Market Supply Curve

Session 6

COMPETITIVE FIRM: PROFIT MAXIMIZATION – LONG RUN
Choosing Output in the Long Run
The Competitive Firm’s Long - Run Supply Curve
The Industry’s Long - Run Supply Curve
When is a Market Perfectly Competitive
Contestable Markets


Session 7

EFFICIENY OF THE COMPETITIVE MARKET, MARKET POWER: MONOPOLY
Evaluating the Gains and Losses from Government Policies - Consumer and Producer Surplus
The Efficiency of a Competitive Market
Market Power: Monopoly

Session 8

MARKET POWER: MONOPOLY, NATURAL MONOPOLY AND REGULATION
Price Discrimination
Social Cost of Monopoly
Natural Monopoly
Regulation
(Competition laws)

Session 9

MONOPOLISTIC COMPETITION AND OLIGOPOLY
Monopoly: Equilibrium in the Short Run and the Long Run
Monopolistic Competition and Economic Efficiency
Oligopoly
Equilibrium in an Oligopolistic Market
(The Cournot Model)

Session 10

OLIGOPOLY: KINKED DEMAND CURVE AND GAME THEORY
The Kinked Demand Curve
The Prisoners’ Dilemma
Game Theory and Competitive Strategy
Noncooperative versus Cooperative Games
Dominant Strategies
The Nash Equilibrium
Maximin Strategies
(Repeated Games, Sequential Games).
Threats, Commitments and Credibility)
Competition laws