NINTH EDITION Managerial Economics And Business Strategy
NINTH EDITIONManagerialandEconomicsBusiness StrategyMichael R. BayeBert Elwert Professor of Business Economics & Public PolicyKelley School of BusinessIndiana UniversityJeffrey T. PrinceAssociate Professor of Business Economics & Public PolicyHarold A. Poling Chair in Strategie ManagementKelley School of BusinessIndiana UniversityMcGrawHillEducation
ContentsCHARTER 1The Fundamentals of ManagerialEconomics 1HEADLINE: Amcott Loses 3.5 Million; ManagerFired 1INTRODUCTION 2The Manager 2Economics 3Managerial Economics Defined 3THE ECONOMICS OF EFFECTIVE MANAGEMENT 4Identify Goals and Constraints 4Recognizethe Nature and Importanceof Profits 4Economic versus Accounting Profits 4The Role of Profits 5The Five Forces Framework and IndustryProfitability 7Understand Incentives 10Understand Markets 11Consumer-Producer Rivalry 11Consumer-Consumer Rivalry 11Producer-Producer Rivalry 11Government and the Market 12Recognize the Time Value of Money 12Present Value Analysis 12Present Value of Indefinitely Lived Assets 14Use Marginal Analysis 16Discrete Decisions 17Continuous Decisions 19Incremental Decisions 20LEARNING MANAGERIAL ECONOMICS 21ANSWERING THE HEADLINE 22KEY TERMS AND CONCEPTS 23 i CONCEPTUAL ANDCOMPUTATIONAL QUESTIONS 23 / PROBLEMS ANDAPPLICATIONS 25 / SELECTED READINGS 28 /APPENDIX: THE CALCULUS OF MAXIMIZING NETBENEFITS 29INSIDE BUSINESS 1-1: The Goals of Firms in Our GlobalEconomy 6INSIDE BUSINESS 1-2: Profits and the Evolution of theComputer Industry 9INSIDE BUSINESS 1-3: Joining the Jet Set 16CHARTER 2Market Forces: Demand and Supply30HEADLINE: Samsung and Hynix Semiconductor to CutChip Production 30INTRODUCTION 31DEMAND 31Demand Shifters 33Income 33Prices of Related Goods 34Advertising and Consumer Tastes 35Population 35Consumer Expectations 36Other Factors 36The Demand Function 36Consumer Surplus 38SUPPLY 39Supply Shifters 40Input Prices 40Technology or Government Regulations 40Number of Firms 40Substitutes in Production 41Taxes 41Producer Expectations 42The Supply Function 43Producer Surplus 44MARKET EQUILIBRIUM 45PRICE RESTRICTIONS AND MARKETEQUILIBRIUM 47Price Ceilings 47Price Floors 51xix
XXContentsCOMPARATIVE STATICS 53Changes in Demand 53Changes in Supply 54Simultaneous Shifts in Supply and Demand 55ANSWERING THE HEADLINE 57SU M MARY 58 / KEY TERMS AND CONCEPTS 58 /CONCEPTUAL AND COMPUTATIONAL QUESTIONS 58 /PROBLEMS AND APPLICATIONS 60 / SELECTEDREADINGS 63INSIDE BUSINESS 2-1: Asahi Breweries Ltd. and theAsian Recession 34INSIDE BUSINESS 2-2: The Trade Act of 2002, NAFTA,and the Supply Curve 42INSIDE BUSINESS 2-3: Unpopulär EquilibriumPrices 46INSIDE BUSINESS 2-4: Price Ceilings and Price Floorsaround the Globe 50INSIDE BUSINESS 2-5: Globalization and the Supply ofAutomobiles 54INSIDE BUSINESS 2-6: Using a Spreadsheetto Calculate Equilibrium in the Supply andDemand Model 55CHARTER 3Quantitative Demand Analysis64HEADLINE: Walmart Hoping for Another Big HolidayShowing 64INTRODUCTION 65THE ELASTICITY CONCEPT 65OWN PRICE ELASTICITY OF DEMAND 66Elasticity and Total Revenue 67Factors Affecting the Own Price Elasticity 71Available Substitutes 71Time 72Expenditure Share 72Marginal Revenue and the Own Price Elasticityof Demand 73CROSS-PRICE ELASTICITY 75INCOME ELASTICITY 77OTHER ELASTICITIES 79OBTAINING ELASTICITIES FROM DEMANDFUNCTIONS 79Elasticities for Linear Demand Functions 80Elasticities for Nonlinear DemandFunctions 81REGRESSION ANALYSIS 84Evaluating the Statistical Significance of EstimatedCoefficients 85Confidence Intervals 86The t-Statistic 87Evaluating the Overall Fit of the RegressionLine 88The R-Square 88The F-Statistic 89Regression for Nonlinear Functions and MultipleRegression 89Regression for Nonlinear Functions 89Multiple Regression 91A Caveat 93ANSWERING THE HEADLINE 94SUMMARY 94 / KEY TERMS AND CONCEPTS 95 /CONCEPTUAL AND COMPUTATIONAL QUESTIONS 95 /PROBLEMS AND APPLICATIONS 97 / SELECTEDREADINGS 100INSIDE BUSINESS 3-1: Calculating and Usingthe Are Elasticity: An Application to the HousingMarket 70INSIDE BUSINESS 3-2: Inelastic Demand for PrescriptionDrugs 74INSIDE BUSINESS 3-3: Using Cross-Price Elasticitiesto Improve New Car Sales in the Wake of IncreasingGasoline Prices 77INSIDE BUSINESS 3-4: Shopping Online inEurope: Elasticities of Demand for PersonalDigital Assistants Based on RegressionTechniques 93CHARTER 4The Theory of Individual Behavior101HEADLINE: Packaging Firm Uses Overtime Pay toOvercome Labor Shortage 101INTRODUCTION 102CONSUMER BEHAVIOR 102CONSTRAINTS 106The Budget Constraint 106Changes in Income 108Changes in Prices 110
ContentsCONSUMER EQUILIBRIUM 111COMPARATIVE STATICS 112Price Changes and Consumer Behavior 112Income Changes and Consumer Behavior 114Substitution and Income Effects 116APPLICATIONS OF INDIFFERENTE CURVEANALYSIS 117Choices by Consumers 117Buy One, Get One Free 117Cash Gifts, In-Kind Gifts, and GiftCertificates 118Choices by Workers and Managers 121A Simpiified Model of Income-LeisureChoice 121The Decisions of Managers 122THE RELATIONSHIP BETWEEN INDIFFERENCE CURVEANALYSIS AND DEMAND CURVES 124Individual Demand 124Market Demand 125ANSWERING THE HEADLINE 126SUMMARY 727/KEY TERMS AND CONCEPTS 1271CONCEPTUAL AND COMPUTATIONAL QUESTIONS 1281PROBLEMS AND APPLICATIONS 130 / SELECTEDREADINGS 133 / APPENDIX: A CALCULUS APPROACHTO INDIVIDUAL BEHAVIOR 133INSIDE BUSINESS 4—1: Indifference Curves and RiskPreferences 105INSIDE BUSINESS 4-2: The Budget Constraints andCredit Cards 109INSIDE BUSINESS 4-3: Price Changes and InventoryManagement for Multiproduct Firms 113INSIDE BUSINESS 4-4: Income Effects and the BusinessCycle 115INSIDE BUSINESS 4-5: The "Deadweight Loss" of In-KindGifts 122INSIDE BUSINESS 4-6: Public Health Centers andOutput-Oriented Incentives 126CHARTER 5The Production Processand Costs 135HEADLINE: Boeing Loses the Battie but Wins theWar 135INTRODUCTION 136xxiTHE PRODUCTION FUNCTION 136Short-Run versus Long-Run Decisions 137Measures of Productivity 138Total Product 138Average Product 138Marginal Product 138The Role of the Manager in the ProductionProcess 140Produce on the ProductionFunction 140Use the Right Level ofinputs 140Algebraic Forms of ProductionFunctions 143Algebraic Measures of Productivity 144Isoquants 146Isocosts 148Cost Minimization 149Optimal Input Substitution 151THE COST FUNCTION 152Short-Run Costs 153Average and Marginal Costs 156Relations among Costs 158Fixed and Sunk Costs 159Algebraic Forms of Cost Functions 160Long-Run Costs 160Economies of Scale 161A Reminder: Economic Costs versus AccountingCosts 162MULTIPLE-OUTPUT COST FUNCTIONS 163Economies of Scope 164Cost Complementarity 164ANSWERING THE HEADLINE 166SUMMARY 166 /KEY TERMS AND CONCEPTS 1671CONCEPTUAL AND COMPUTATIONAL QUESTIONS 167 /PROBLEMS AND APPLICATIONS 169 / SELECTEDREADINGS 173 / APPENDIX: THE CALCULUS OFPRODUCTION AND COSTS 173INSIDE BUSINESS 5-1: Where Does Technology ComeFrom? 142INSIDE BUSINESS 5-2: The Affordable Care Act,Employer Mandate, and Input Substitution 154INSIDE BUSINESS 5-3: Estimating ProductionFunctions, Cost Functions, and Returnsto Scale 162INSIDE BUSINESS 5-4: International Companies ExploitEconomies of Scale 163
xxiiContentsCHARTER 6The Organization of the Firm175HEADLINE: Google Buys Motorola Mobility to VerticallyIntegrale 175INTRODUCTION 176METHODS OF PROCURING INPUTS 177Purchase the Inputs Using Spot Exchange 177Acquire Inputs Under a Contract 177Produce the Inputs Internally 178TRANSACTION COSTS 179Types of Specialized Investments 179Site Specificity 179Physical-Asset Specificity 180Dedicated Assets 180Human Capital 180Implications of Specialized Investments 180Costly Bargaining 180Underinvestment 180Opportunism and the "Hold-Up Problem" 181OPTIMAL INPUT PROCUREMENT 182Spot Exchange 182Contracts 183Vertical Integration 186The Economic Trade-Off 186MANAGERIAL COMPENSATION AND THEPRINCIPAL-AGENT PROBLEM 189FORCES THAT DISCIPLINE MANAGERS 191Incentive Contracts 191External Incentives 192Reputation 192Takeovers 192THE MANAGER-WORKER PRINCIPAL-AGENTPROBLEM 192Solutions to the Manager-Worker Principal-AgentProblem 192Profit Sharing 192Revenue Sharing 193Piece Rates 193Time Clocks and Spot Checks 194ANSWERING THE HEADLINE 195SUMMARY 795/KEY TERMS AND CONCEPTS 196/CONCEPTUAL AND COMPUTATIONAL QUESTIONS 196 /PROBLEMS AND APPLICATIONS 197 / SELECTEDREADINGS 200 / APPENDIX: AN INDIFFERENCE CURVEAPPROACH TO MANAGERIAL INCENTIVES 200INSIDE BUSINESS 6-1: The Cost of Using an InefficientMethod of Procuring Inputs 182INSIDE BUSINESS 6-2: What Determines Contract Lengthin Franchising? 186INSIDE BUSINESS 6-3: The Evolution of Input Decisionsin the Automobile Industry 187INSIDE BUSINESS 6-4: Paying for Performance 194CHARTER 7The Nature of Industry203HEADLINE: AT&T Puts Halt to T-Mobile Merger 203INTRODUCTION 204MARKET STRUCTURE 204Firm Size 204Industry Concentration 205Measures of Industry Concentration 206The Concentration ofU.S. Industry 207Limitations of Concentration Measures 208Technology 209Demand and Market Conditions 210Potential for Entry 212CONDUCT 214Pricing Behavior 214Integration and Merger Activity 215Vertical Integration 216Horizontal Integration 216Congiomerate Mergers 217Research and Development 217Advertising 217PERFORMANCE 218Profits 218Social Weifare 218THE STRUCTURE-CONDUCT-PERFORMANCEPARADIGM 219The Causal View 220The Feedback Critique 220Relation to the Five Forces Framework 220OVERVIEW OF THE REMAINDER OF THE BOOK 221Perfect Competition 221Monopoly 222Monopolistic Competition 222Oligopoly 222ANSWERING THE HEADLINE 224
ContentsSUMMARY 224 / KEY TERMS AND CONCEPTS 224 /CONCEPTUAL AND COMPUTATIONAL QUESTIONS 225 /PROBLEMS AND APPLICATIONS 226 / SELECTEDREADINGS 228INSIDE BUSINESS 7-1: The 2012 North AmericanIndustry Classification System (NAICS) 210INSIDE BUSINESS 7-2: The Elasticity of Demand at theFirm and Market Levels 213INSIDE BUSINESS 7-3: The Evolution of Market Structurein the Computer Industry 223CHARTER 8xxiiiOPTIMAL ADVERTISING DECISIONS 260ANSWERING THE HEADLINE 262SUMMARY 263 / KEY TERMS AND CONCEPTS 263 /CONCEPTUAL AND COMPUTATIONAL QUESTIONS 263 /PROBLEMS AND APPLICATIONS 265 / SELECTEDREADINGS 268 / APPENDIX: THE CALCULUS OF PROFITMAXIMIZATION 269 / APPENDIX: THE ALGEBRA OFPERFECTLY COMPETITIVE SUPPLY FUNCTIONS 269INSIDE BUSINESS 8-1: Peugeot-Citroen of France: APrice-Taker in China's Auto Market 235INSIDE BUSINESS 8-2: Patent, Trademark, and CopyrightProtection 246INSIDE BUSINESS 8-3: Product Differentiation,Cannibalization, and Colgate's Smile 255Managing in Competitive, Monopolistic,and Monopolistically CompetitiveMarkets 229HEADLINE: McDonald's New Buzz: SpeciaityCoffee 229INTRODUCTION 230PERFECT COMPETITION 230Demand at the Market and Firm Levels 231Short-Run Output Decisions 232Maximizing Profits 232Minimizing Losses 236The Short-Run Firm and Industry SupplyCurves 238Long-Run Decisions 239MONOPOLY 241Monopoly Power 241Sources of Monopoly Power 242Economies of Scale 242Economies ofScope 243Cost Complementarity 244Patents and Other Legal Barriers 244Maximizing Profits 244Marginal Revenue 245The Output Decision 248The Absence ofa Supply Curve 251Multiplant Decisions 251Implications of Entry Barriers 253MONOPOLISTIC COMPETITION 255Conditions for Monopolistic Competition 255Profit Maximization 256Long-Run Equilibrium 257Implications of Product Differentiation 259CHARTER 9Basic Oligopoly Models270HEADLINE: Crude Oil Prices Fall, but Consumers inSome Areas See No Relief at the Pump 270INTRODUCTION 271CONDITIONS FOR OLIGOPOLY 271THE ROLE OF BELIEFS AND STRATEGICINTERACTION 271PROFIT MAXIMIZATION IN FOUR OLIGOPOLYSETTINGS 273Sweezy Oligopoly 273Cournot Oligopoly 274Reaction Functions and Equilibrium 275Isoprofit Curves 279Changes in Marginal Costs 281Collusion 283Stackelberg Oligopoly 284Bertrand Oligopoly 288COMPARING OLIGOPOLY MODELS 290Cournot 290Stackelberg 291Bertrand 291Collusion 291CONTESTABLE MARKETS 292ANSWERING THE HEADLINE 293SUMMARY 295 / KEY TERMS AND CONCEPTS 295 /CONCEPTUAL AND COMPUTATIONAL QUESTIONS 295 /PROBLEMS AND APPLICATIONS 297 / SELECTED
xxivContentsREADINGS 300 / APPENDIX: DIFFERENTIATEDPRODUCT BERTRAND OLIGOPOLY 300INSIDE BUSINESS 9-1: OPEC Members Can't Help butCheat 285INSIDE BUSINESS 9-2: Commitment in StackelbergOligopoly 287INSIDE BUSINESS 9-3: Price Competition and theNumber of Seilers: Evidence from Online andLaboratory Markets 289INSIDE BUSINESS 9-4: Using a Spreadsheetto Calculate Cournot, Stackelberg, and CollusiveOutcomes 292CHARTER 10Game Theory: Inside Oligopoly302HEADLINE: Bring Back Complimentary Drinks! 302INTRODUCTION 303OVERVIEW OF GAMES AND STRATEGICTHINKING 303SIMULTANEOUS-MOVE, ONE-SHOT GAMES 304Theory 304Applications of One-Shot Games 307Pricing Decisions 307Advertising and Quaiity Decisions 309Coordination Decisions 310Monitoring Empioyees 311Nash Bargaining 312INFINITELY REPEATED GAMES 314Theory 314Review of Present Value 314Supporting Collusion with Trigger Strategies 314Factors Affecting Collusion in Pricing Games 317Number of Firms 317Firm Size 317History of the Market 317Punishment Mechanisms 318An Application of Infinitely Repeated Games to ProductQuaiity 319FINITELY REPEATED GAMES 320Games with an Uncertain Final Period 320Repeated Games with a Known Final Period:The End-of-Period Problem 323Applications of the End-of-Period Problem 324Resignations and Ouits 324The "Snake-Oil" Salesman 325MULTISTAGE GAMES 325Theory 325Applications of Multistage Games 328The Entry Game 328Innovation 329Sequential Bargaining 330ANSWERING THE HEADLINE 331SUMMARY 332 / KEY TERMS AND CONCEPTS 332 /CONCEPTUAL AND COMPUTATIONAL QUESTIONS 333 /PROBLEMS AND APPLICATIONS 335 / SELECTEDREADINGS 339INSIDE BUSINESS 10-1: Hollywood's (not so) BeautifulMind: Nash or "Opie" Equilibrium? 307INSIDE BUSINESS 10-2: Cola Wars in India 309INSIDE BUSINESS 10-3: Trigger Strategies in the WasteIndustry 318INSIDE BUSINESS 10-4: Multimarket Contact and PriceCompetition 320INSIDE BUSINESS 10-5: Entry Strategies in InternationalMarkets: Sprinkler or Waterfall? 327CHARTER 1 1Pricing Strategies for Firms with MarketPower 340HEADLINE: Mickey Mouse Lets You Ride "for Free"at Disney World 340INTRODUCTION 341BASIC PRICING STRATEGIES 341Review of the Basic Rule of ProfitMaximization 341A Simple Pricing Rule for Monopoly and MonopolisticCompetition 342A Simple Pricing Rule for Cournot Oligopoly 345STRATEGIES THAT YIELD EVEN GREATERPROFITS 347Extracting Surplus from Consumers 347Price Discrimination 347Two-Part Pricing 351Block Pricing 354Commodity Bundling 356Pricing Strategies for Special Cost and DemandStructures 358Peak-Load Pricing 358Cross-Subsidies 359Transfer Pricing 360
ContentsPricing Strategies in Markets with Intense PriceCompetition 362Price Matching 362Inducing Brand Loyalty 364Randomized Pricing 364ANSWERING THE HEADLINE 366SUMMARY 366 / KEY TERMS AND CONCEPTS 367 /CONCEPTUAL AND COMPUTATIONAL QUESTIONS 367/PROBLEMS AND APPLICATIONS 369 / SELECTEDREADINGS 371INSIDE BUSINESS 11-1: Pricing Markups as RulesofThumb 343INSIDE BUSINESS 11-2: Is Price Discrimination Badfor Consumers? 352INSIDE BUSINESS 11-3: Bundling and "Price Frames"in Online Markets 357INSIDE BUSINESS 11-4: The Prevalence ofPrice-Matching Policies and Other Low-PriceGuarantees 363INSIDE BUSINESS 11-5: Kroger Combines PricingStrategies 364INSIDE BUSINESS 11-6: Randomized Pricing in theAirline Industry 365CHARTER 12The Economics of Information372HEADLINE: Firm Chickens Out in the FCC SpectrumAuction 372INTRODUCTION 373THE MEAN AND THE VARIANCE 373UNCERTAINTY AND CONSUMERBEHAVIOR 375Risk Aversion 375Manageriai Decisions with Risk-AverseConsumers 376Consumer Search 378UNCERTAINTY AND THE FIRM 380Risk Aversion 381Producer Search 383Profit Maximization 383UNCERTAINTY AND THE MARKET 384Asymmetrie Information 384Adverse Seiection 386Moral Hazard 387Signaling and Screening 388XXVAUCTIONS 390Types of Auctions 391English Auction 391First-Price, Sealed-Bid Auction 391Second-Price, Sealed-Bid Auction 392Dutch Auction 392Information Structures 393Independent Private Values 393Correlated Vaiue Estimates 394Optimal Bidding Strategies for Risk-NeutralBidders 394Strategies for Independent Private ValuesAuctions 394Strategies for Correlated Values Auctions 396Expected Revenues in Alternative Types of Auctions 397ANSWERING THE HEADLINE 399SUMMARY 4001 KEY TERMS AND CONCEPTS 400 /CONCEPTUAL AND COMPUTATIONAL QUESTIONS 400/PROBLEMS AND APPLICATIONS 402 / SELECTEDREADINGS 405INSIDE BUSINESS 12-1: Risk Aversion and the Vaiue ofSelling the Firm: The St. Petersburg Paradox 376INSIDE BUSINESS 12-2: Obfuscation to Counter LowInternet Search Costs 379INSIDE BUSINESS 12-3: Groucho Marx theEconomist? 386INSIDE BUSINESS 12-4: Second-Price Auctions oneBay 392INSIDE BUSINESS 12-5: Auctions with Risk-AverseBidders 399CHARTER 13Advanced Topics in BusinessStrategy 406HEADLINE: Local Restaurateur Faces LoomingChallenge from Morton's 406INTRODUCTION 407LIMIT PRICING TO PREVENT ENTRY 408Theoretical Basis for Limit Pricing 408Limit Pricing May Fail to Deter Entry 409Linking the Preentry Price to Postentry Profits 410Commitment Mechanisms 411Learning Curve Effects 412Incomplete Information 412Reputation Effects 413Dynamic Considerations 413
xxviContentsPREDATORY PRICING TO LESSENCOMPETITION 415RAISING RIVALS' COSTS TO LESSENCOMPETITION 417Strategies Involving Marginal Cost 418Strategies Involving Fixed Costs 419Strategies for Vertically Integrated Firms 419Vertical Foreclosure 420The Price-Cost Squeeze 420PRICE DISCRIMINATION AS A STRATEGIC TOOL 420CHANGING THE TIMING OF DECISIONS OR THEORDER OF MOVES 421First-Mover Advantages 421Second-Mover Advantages 423PENETRATION PRICING TO OVERCOME NETWORKEFFECTS 424What Is a Network? 424Network Externalities 425First-Mover Advantages Due to ConsumerLock-In 426Using Penetration Pricing to "Change the Game" 427ANSWERING THE HEADLINE 429SUMMARY 429 / KEY TERMS AND CONCEPTS 430 /CONCEPTUAL AND COMPUTATIONAL QUESTIONS 430 /PROBLEMS AND APPLICATIONS 432 f SELECTEDREADINGS 434INSIDE BUSINESS 13-1: Business Strategy atMicrosoft 410INSIDE BUSINESS 13-2: Limit Pricing and the "SouthwestEffect" 415INSIDE BUSINESS 13-3: First to Market, First toSucceed? Or First to Fail? 423INSIDE BUSINESS 13-4: Network Externalities andPenetration Pricing by Yahoo! Auctions 427CHARTER 14A Manager's Guide to Government in theMarketplace 435HEADLINE: FTC Conditionally Approves 10.3 BillionMerger 435INTRODUCTION 436MARKET FAILURE 436Market Power 436Antitrust Policy 437Price Regulation 440Externalities 444The Clean Air Act 446Public Goods 448Incomplete Information 451Rules against Insider Trading 452Certification 452Truth in Lending 453Truth in Advertising 454Enforcing Contracts 454RENT SEEKING 455GOVERNMENT POLICY AND INTERNATIONALMARKETS 457Quotas 457Tariffs 459Lump-Sum Tariffs 459Excise Tariffs 460ANSWERING THE HEADLINE 461SUMMARY 461 / KEY TERMS AND CONCEPTS 461 /CONCEPTUAL AND COMPUTATIONAL QUESTIONS 462!PROBLEMS AND APPLICATIONS 464 / SELECTEDREADINGS 466INSIDE BUSINESS 14-1: European Commission MovestoProtect Small Businesses 439INSIDE BUSINESS 14-2: Electricity Deregulation 443INSIDE BUSINESS 14-3: Canada's CompetitionBureau 455CASE STUDYTime Warner Cable468HEADLINE 468BACKGROUND 469Time Warner Cable History 469Cable Television History 469Broadband Internet 470BUSINESS AND MARKETS 471Video Programming 471Internet Services 473Telephone 473COMPETITION 474Cable Companies 474Comcast 474Comcast/Time Warner Cable ProposedAcquisition 475Charter Communications 475Other Cable Players 476
ContentsSatellite 476AT&T DirecTV 476Dish Network 477Telephone Providers 477Verizon 477AT&T 477Other Companies 478Online Video Distributors 478Netflix 478Amazon Prime Video 479Hulu 479Google/YouTube 479SUPPLIERS 480Cable Networks 480Broadcast Networks 480Sports Programming 481Carriage Disputes 481Over-the-Top Content 482MARKET TRENDS AND CONSUMER BEHAVIOR 482Digital Video Recorders (DVRs) 482Cutting the Cord 483Going Mobile 483REGULATION IN THE CABLE INDUSTRY 483Carriage of Broadcast Television 484Cable Pricing Regulation 484Net Neutrality 484Connect America Fund 484CHALLENGES 484CASE-BASED EXERCISES 485MEMOS 485SELECTED READINGS AND REFERENCES 492 /APPENDIX: EXHIBITS 493Glossary497Appendix Additional Readings andReferences 505Name IndexGeneral Index525534xxvii
Managerial Economics and Business Strategy Michael R. Baye Bert Elwert Professor of Business Economics & Public Policy Kelley School of Business Indiana University Jeffrey T. Prince Associate Professor of Business Economics & Public Policy Harold A. Poling Chair in Strategie Management Kell
Managerial Economics way, managerial economics may be considered as economics applied to “problems of choice’’ or alternatives and allocation of scarce resources by the firms. 1.2 MEANING OF MANAGERIAL ECONOMICS Managerial Economics is a discipline that combines e
Managerial Economics as a subject gained popularly in U.S.A after the publication of the book “Managerial Economics” by Joel Dean in 1951. Joel Dean observed that managerial Economics shows how economic analysis can be used in formulating policies. Managerial economics bridges the
ÿ Managerial economics differs from microeconomics in that microeco-nomics focuses on description and prediction while managerial eco-nomics is prescriptive. ÿ Managerial economics prescribes behavior, whereas microeconomics describes the environment. ÿ Managerial economics is an integrative course that brings the various
1. Essentials of Business Economics- D N Dwivedi, Vikas Publications. 2. Managerial Economics - Dom inick Sal watore . 3. Managerial Economics - Gupta and Mote 4. Economics - Samuel son & N or dhaus 5. Managerial Economics by Peterson and Lewis 6. Micro Economics – Dominick Salvatore 7. Macro Economics –
Managerial Economics, Suma Damodaran, Oxford. Macro Economics by MN Jhingan-Oxford Managerial Economics- Dr.DM.Mithani-Himalaya Publishers Managerial Economics-Dr.H.L Ahuja-S.Chand and Com pvt ltd, NewDelhi Manageria
Managerial Economics is ‘Normative’ Universal applicability The roots of Managerial Economics came from Micro Economics Relation of Managerial Economics to Economic Theory is much like that of Engineering to Physics or Medicine to Biology. It is the relation of applied field to basic fundamental disciplin
H2: Financial Versus Managerial Accounting 5) A budget is a managerial accounting tool used in the planning process. Answer: TRUE Diff: 1 LO: 16-1 AICPA Functional: Reporting PE Question Type: Concept H2: Financial Versus Managerial Accounting Test Bank for Horngrens Financial and Managerial Accounting The Managerial Chapters 5th Edition by .
1. Managerial Economics – Analysis, Problems and Cases, P.L. Mehta, Sultan Chand Sons, New Delhi 2. Managerial Economics – Varshney and Maheshwari, Sultan Chand and Sons, New Delhi 3. Managerial Economics – D. Salvatore, McGraw Hill, New Delhi 4. Managerial Economics – Pearson and Lewis, Prentice Hall, New Delhi 5.
