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Index
Managerial economics : analysis and strategy
Managerial
Economics
DISTINCTIVE FEATURES OF THIS TEXT
1. Flexibility
2. Currency
3. Breadth and Depth of Coverage
4. Capstone Chapters
5. More and Better Case-Study Problems
6. Learning and Teaching Aids
ACKNOWLEDGMENTS
Introduction to Managerial Economics
The Present Period with Certainty
Future Periods with Certainty
The Present Period with Uncertainty
Future Periods with Uncertainty
The Principal-Agent Problem
1.6 SUMMARY
PROBLEMS AND SHORT CASES 13
20,000
Decision Making under Risk and Uncertainty
The Certainty-Equivalent Criterion
The Maximin Decision Criterion
Which Criterion Should Be Applied?
2.5 SEARCH COSTS AND THE VALUE OF INFORMATION Search Costs
The Value of Information
2.6 EVALUATION OF THE DECISION MADE
Three Basic Considerations
The Timing of the Decision
Sensitivity Analysis
2.7 SUMMARY
DISCUSSION QUESTIONS
Utility Analysis of Consumer Behavior
Preference and Indifference
The Consumer’s Budget Constraint
p J
Changes in Consumer Perceptions
New Products
Market Segments
Problems of Identifying and Measuring Attributes
3.4 SUMMARY
DISCUSSION QUESTIONS
Appendix 3A: Indifference-Curve Analysis of the Income and Substitution Effects of a Price Change
Market Demand Analysis for Decision Making
F ‘ = ~T, +
Advertising and Cross-Advertising Elasticities
The Value of Elasticities
4.6 SUMMARY
DISCUSSION QUESTIONS
PROBLEMS AND SHORT CASES
SUGGESTED REFERENCES AND FURTHER READING
Estimation of the Demand Function
The Coefficient of Determination
The Standard Error of Estimate
The Standard Error of the Coefficient
Problems in Regression Analysis: Six Major Pitfalls
5.4 SUMMARY
DISCUSSION QUESTIONS
SUGGESTED REFERENCES AND FURTHER READING
Appendix 5A: Demand Forecasting
Q, = 12,586.83 + 452.39*
Macroeconomic Forecasting
Summary
DISCUSSION QUESTIONS
PROBLEMS AND SHORT CASES
SUGGESTED REFERENCES AND FURTHER READING
Production Functions and Cost Curves
222
Different Production Functions Cause Different Cost Curves
Linear TVC Curves Resulting from Plant Divisibility
The Short-Run Supply Decision
The Long-Run Average Cost Curve
The Long-Run Marginal Cost Curve
Returns to Plant Size and Firm Size
The Learning Curve
6.4 SUMMARY
DISCUSSION QUESTIONS
PROBLEMS AND SHORT CASES
SUGGESTED REFERENCES AND FURTHER READING
Appendix 6A: Isoquant-Isocost Analysis of Production and Costs
The Expansion Path: Long Run and Short Run
Factor Substitution Resulting from Changed Factor Prices
Different Factor Price Ratios in Different Economies
Isoquant-Isocost Analysis of Short-Run Production Problems
Summary
DISCUSSION QUESTIONS
PROBLEMS AND SHORT CASES
Appendix 6B: Linear Programming Analysis
Other Applications of Linear Programming
Summary
DISCUSSION QUESTIONS
PROBLEMS AND SHORT CASES
Cost Concepts for Decision Making
Multiperiod Contribution Analysis
7.5 SUMMARY
DISCUSSION QUESTIONS
PROBLEMS AND SHORT CASES
Appendix 7A: Breakeven Analysis: Applications and Limitations
Cost Estimation and Forecasting
Regression Analysis Using Time-Series Data
The Engineering Technique of Cost Estimation
/X
SUGGESTED REFERENCES AND FURTHER READING
Models of the Firm’s Pricing Decision
9.4 PRICING FOR LONGER-TERM OBJECTIVES
Sales Maximization with a Minimum Profit Target
Limit Pricing to Deter Entry
Satisficing: Achieving Targets as a Managerial Objective
9.5 SUMMARY
DISCUSSION QUESTIONS
SUGGESTED REFERENCES AND FURTHER READING
Appendix 9A: Further Models of Pricing Behavior
Transfer Pricing
Delivered Prices and Spatial Competition
Summary
DISCUSSION QUESTIONS
Pricing Decisions in Practice
Markup Pricing under Inflationary Conditions
Markup Pricing as a Coordinating Device
10.3 PRICING IN ESTABLISHED MARKETS
Price Positioning
Product-Line Price Strategy
Pricing to Infer Quality
Pricing Product Bundles
Promotional Pricing
10.4 SUMMARY
SUGGESTED REFERENCES AND FURTHER READING
Appendix 10A: Illegal Pricing Practices
New Product Pricing
11.4 SUMMARY
DISCUSSION QUESTIONS
PROBLEMS AND SHORT CASES
SUGGESTED REFERENCES AND FURTHER READING
Competitive Bids and Price Quotes
Markup Bid Pricing for the Satisficing Firm
12.4 THE VIEW FROM THE OTHER SIDE:
OPTIMAL PURCHASING
Value Analysis for Optimal Purchasing
Collusive Bidding and Bid Disclosure
12.5 SUMMARY
DISCUSSION QUESTIONS
SUGGESTED REFERENCES AND FURTHER READING
Advertising and Promotional Decisions
Simultaneous Adjustment of Price and Advertising Levels
13.3 ADVERTISING AND PROMOTIONAL EXPENDITURES WHEN MUTUAL DEPENDENCE IS RECOGNIZED
Advertising Interdependence
The Prisoner’s Dilemma
Coordination of Advertising Expenditures
13.4 UNCERTAINTY IN ADVERTISING
Predictability and Probabilities
Advertising as an Investment
Advertising to Raise Barriers to Entry
13.5 SUMMARY
DISCUSSION QUESTIONS
Product Quality and Competitive Strategy
When the Cost-Leader Position Is Vacant
The Implications of Cost Leadership for Product Design
Pricing and Advertising Strategies to Complement Cost Leadership
14.3 PRODUCT DESIGN FOR A
DIFFERENTIATION STRATEGY
Quality Leadership
Differentiation on the Basis of Search, Experience, and Credence Products
Brand Name Advantages
Implications of Quality Leadership for Product Design
Pricing and Advertising Strategies to Complement Quality Leadership
PRODUCT DESIGN FOR A FOCUS STRATEGY
The Cost-Focus Strategy
The Quality-Focus Strategy
Product Design, Pricing, and Advertising for Focus Strategies
14.5 SUMMARY
DISCUSSION QUESTIONS
PROBLEMS AND SHORT CASES
SELECTED REFERENCES AND FURTHER READING
Capital Budgeting and Investment Decisions
The Internal-Rate-of-Return Criterion
Relationship between NPV and IRR
10,000
10,000
10,000
Y = a + fc,A, + b 2 X 2 + b 3 X 3 + . . . + b„X„ (A-4)
Present Value Tables
Answers to the Problems
APPENDIX 3A
CHAPTER 4
(b) $200.
6 - 1 .
6 - 10 .
APPENDIX 6A
APPENDIX 6B
$124.
Author Index
Subject Index
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