{"product_id":"managerial-economics-isbn-9781118091364","title":"Managerial Economics","description":"Uncertainty is present in every managerial decision, and \u003ci\u003eManagerial Economics: A Mathematical Approach\u003c\/i\u003e effectively demonstrates the application of higher-level statistical tools to inform and clarify the logic of problem solving in a managerial environment.  \u003cp\u003eWhile illuminating managerial decision-making from all possible angles, this book equips readers with the tools and skills needed to recognize and address uncertainty. The book also explores individual, firm, and market-level decisions; discusses all possible risks and uncertainties encountered in the decision-making process; and prepares readers to deal with both epistemic and aleatory uncertainty in managerial decisions. \u003ci\u003eManagerial Economics\u003c\/i\u003e features:\u003c\/p\u003e \u003cp\u003e• An emphasis on practical application through real-life examples and problems\u003c\/p\u003e \u003cp\u003e• An accessible writing style that presents technical theories in a user-friendly way\u003c\/p\u003e \u003cp\u003e• A mathematical and statistical point of view that reveals the presence of uncertainty inherent in managerial decisions\u003c\/p\u003e \u003cp\u003e• Thoroughly class-tested material including problems at the end of each chapter, case study questions, review exercises, and objectives that summarize the main discussions\u003c\/p\u003e \u003cp\u003e\u003ci\u003eManagerial Economics\u003c\/i\u003e is an excellent book for upper-undergraduate and graduate-level courses in business and economics departments. The book is also an ideal reference and resource for managers, decision makers, market analysts, and researchers who require information about the theoretical and quantitative aspects of the topic.\u003c\/p\u003e \u003cp\u003ePREFACE xix\u003c\/p\u003e \u003cp\u003e\u003cb\u003eUNIT I METHODOLOGICAL PRELIMINARIES\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e1 Qualitative Fundamentals 3\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e1.1 Economic Theory and Managerial Economics 3\u003c\/p\u003e \u003cp\u003e1.2 Some Methodological Fallacies 5\u003c\/p\u003e \u003cp\u003e1.3 Paradigms, Models, and the Scientific Method 6\u003c\/p\u003e \u003cp\u003e1.4 The Descriptive and Prescriptive Treatments 8\u003c\/p\u003e \u003cp\u003e1.5 The Profit Function: Accounting versus Economics 8\u003c\/p\u003e \u003cp\u003e1.6 Entrepreneurship, Management, and Leadership 9\u003c\/p\u003e \u003cp\u003eSummary 11\u003c\/p\u003e \u003cp\u003eKey Terms 12\u003c\/p\u003e \u003cp\u003eExercises 12\u003c\/p\u003e \u003cp\u003e\u003cb\u003e2 Quantitative Fundamentals 13\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e2.1 Introduction 13\u003c\/p\u003e \u003cp\u003e2.2 Functions 14\u003c\/p\u003e \u003cp\u003e2.3 Exponents 16\u003c\/p\u003e \u003cp\u003e2.4 Logarithms and the Number e 18\u003c\/p\u003e \u003cp\u003e2.5 Differential Calculus 19\u003c\/p\u003e \u003cp\u003e2.6 Multivariate and Equality Constrained Optimization 22\u003c\/p\u003e \u003cp\u003e2.7 Inequality Constrained Optimization: Linear Programming 30\u003c\/p\u003e \u003cp\u003e2.8 Selected Statistical Concepts 30\u003c\/p\u003e \u003cp\u003e2.9 Maximum Likelihood Estimation 36\u003c\/p\u003e \u003cp\u003e2.10 Ordinary and Nonlinear Least Squares Estimation 37\u003c\/p\u003e \u003cp\u003eSummary 38\u003c\/p\u003e \u003cp\u003eKey Terms 40\u003c\/p\u003e \u003cp\u003eList of Formulas 40\u003c\/p\u003e \u003cp\u003eExercises 42\u003c\/p\u003e \u003cp\u003e\u003cb\u003eUNIT II DECISIONS AT THE CONSUMER LEVEL\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e3 Theory of Consumer Choice 47\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e3.1 Consumer Preferences 47\u003c\/p\u003e \u003cp\u003e3.1.1 Indifference Curve 50\u003c\/p\u003e \u003cp\u003e3.1.2 Marginal Rate of Substitution (MRS) 52\u003c\/p\u003e \u003cp\u003e3.1.3 Nontypical Indifference Curves 55\u003c\/p\u003e \u003cp\u003e3.2 Consumer’s Affordability 58\u003c\/p\u003e \u003cp\u003e3.2.1 Budget Line 58\u003c\/p\u003e \u003cp\u003e3.2.2 Slope of the Budget Line 60\u003c\/p\u003e \u003cp\u003e3.2.3 Shift, Swing, and Kink of the Budget Line 60\u003c\/p\u003e \u003cp\u003eThe Shift 60\u003c\/p\u003e \u003cp\u003eThe Swing 63\u003c\/p\u003e \u003cp\u003eThe Kink 64\u003c\/p\u003e \u003cp\u003e3.2.4 Three-Dimensional Budget 66\u003c\/p\u003e \u003cp\u003e3.3 The Optimal Choice 68\u003c\/p\u003e \u003cp\u003e3.3.1 Interior and Corner Solutions 69\u003c\/p\u003e \u003cp\u003e3.3.2 Utility and Its Measurability 71\u003c\/p\u003e \u003cp\u003e3.3.3 Utility Maximization 76\u003c\/p\u003e \u003cp\u003e3.4 Effects on the Optimal Choice 81\u003c\/p\u003e \u003cp\u003e3.4.1 Change in Income 81\u003c\/p\u003e \u003cp\u003eNormal and Inferior Commodities 82\u003c\/p\u003e \u003cp\u003eIncome–Consumption Curve 83\u003c\/p\u003e \u003cp\u003eEngel Curve: Nominal and Real 83\u003c\/p\u003e \u003cp\u003eEngel Curve and Income–Consumption Curve for Homothetic and Quasi-Linear Preferences 85\u003c\/p\u003e \u003cp\u003eIncome Elasticity of Demand 86\u003c\/p\u003e \u003cp\u003e3.4.2 Change in Prices 88\u003c\/p\u003e \u003cp\u003eGiffen and Non-Giffen Commodities 90\u003c\/p\u003e \u003cp\u003ePrice–Consumption Curve 90\u003c\/p\u003e \u003cp\u003ePrice Change and the Demand Curve 91\u003c\/p\u003e \u003cp\u003ePrice Elasticity of Demand 91\u003c\/p\u003e \u003cp\u003eSubstitutes and Complements 93\u003c\/p\u003e \u003cp\u003eCross-Price Elasticity of Demand 94\u003c\/p\u003e \u003cp\u003e3.5 Income and Substitution Effects 95\u003c\/p\u003e \u003cp\u003e3.6 Slutsky Equation 96\u003c\/p\u003e \u003cp\u003eSummary 98\u003c\/p\u003e \u003cp\u003eKey Terms 99\u003c\/p\u003e \u003cp\u003eList of Formulas 99\u003c\/p\u003e \u003cp\u003eExercises 101\u003c\/p\u003e \u003cp\u003e\u003cb\u003e4 Consumer Demand: Theoretical Analysis 103\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e4.1 Demand and Supply: Functions and Laws 103\u003c\/p\u003e \u003cp\u003e4.2 Deriving a Demand Function from Utility Maximization 105\u003c\/p\u003e \u003cp\u003e4.3 Homogeneity and the Numeraire 109\u003c\/p\u003e \u003cp\u003e4.4 Inverse Demand Function 111\u003c\/p\u003e \u003cp\u003e4.5 Demand and Supply: Table and Curves 111\u003c\/p\u003e \u003cp\u003e4.6 Market Equilibrium 114\u003c\/p\u003e \u003cp\u003e4.7 From Individual to Market Demand 120\u003c\/p\u003e \u003cp\u003e4.8 Demand and Network Externalities 122\u003c\/p\u003e \u003cp\u003e4.8.1 The Case of the Bandwagon Effect 122\u003c\/p\u003e \u003cp\u003e4.8.2 The Case of the Snob Effect 124\u003c\/p\u003e \u003cp\u003e4.9 Deriving a Market Demand Function under Externalities 126\u003c\/p\u003e \u003cp\u003e4.10 Changes in QD and QS versus Changes in D and S 129\u003c\/p\u003e \u003cp\u003e4.11 Changes in Equilibrium 131\u003c\/p\u003e \u003cp\u003e4.11.1 The Case of Thanksgiving Turkey 132\u003c\/p\u003e \u003cp\u003e4.11.2 The Case of Sales and Excise Taxes 134\u003c\/p\u003e \u003cp\u003e4.12 Market Disequilibrium 138\u003c\/p\u003e \u003cp\u003e4.12.1 The Case of a Price Ceiling 139\u003c\/p\u003e \u003cp\u003e4.12.2 The Case of a Price Floor 142\u003c\/p\u003e \u003cp\u003e4.13 Marshallian versus Hicksian Demand Curves 144\u003c\/p\u003e \u003cp\u003e4.13.1 Shephard Lemma and the Expenditure Function 145\u003c\/p\u003e \u003cp\u003e4.14 Deriving the Hicksian (Compensated) Demand Curve 147\u003c\/p\u003e \u003cp\u003e4.15 Revealed Preferences 149\u003c\/p\u003e \u003cp\u003e4.16 Interdependent Demand 152\u003c\/p\u003e \u003cp\u003eSummary 155\u003c\/p\u003e \u003cp\u003eKey Terms 157\u003c\/p\u003e \u003cp\u003eList of Formulas 157\u003c\/p\u003e \u003cp\u003eExercises 157\u003c\/p\u003e \u003cp\u003e\u003cb\u003e5 Consumer Demand: Empirical Estimation 160\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e5.1 Simple Market Experimentation 160\u003c\/p\u003e \u003cp\u003e5.2 Linearity of the Demand Function: From Visual to Regression 163\u003c\/p\u003e \u003cp\u003e5.3 Reliability of the Estimation 168\u003c\/p\u003e \u003cp\u003e5.4 Quality of Fitting 170\u003c\/p\u003e \u003cp\u003e5.5 Fitting by Computerized Regression 172\u003c\/p\u003e \u003cp\u003e5.6 Demand Estimation by the Multiple Regression Method 174\u003c\/p\u003e \u003cp\u003e5.6.1 Results and Interpretation 179\u003c\/p\u003e \u003cp\u003e5.6.2 Goodness of Fit 181\u003c\/p\u003e \u003cp\u003e5.6.3 The Overall Explanatory Power of the Model 182\u003c\/p\u003e \u003cp\u003e5.6.4 Major Problems to Check On 183\u003c\/p\u003e \u003cp\u003eMulticollinearity 183\u003c\/p\u003e \u003cp\u003eAutocorrelation 184\u003c\/p\u003e \u003cp\u003eHeteroscedasticity 185\u003c\/p\u003e \u003cp\u003e5.7 Nonregression Approaches to Estimation 186\u003c\/p\u003e \u003cp\u003e5.7.1 Market Experimentation 186\u003c\/p\u003e \u003cp\u003e5.7.2 Observational Studies 187\u003c\/p\u003e \u003cp\u003e5.7.3 Micromarketing and Virtual Shopping 187\u003c\/p\u003e \u003cp\u003e5.8 Advanced Demand Estimation: The Pad Model 188\u003c\/p\u003e \u003cp\u003e5.8.1 Model Specification 188\u003c\/p\u003e \u003cp\u003eDesired Demand 188\u003c\/p\u003e \u003cp\u003eAdjustment Equation 188\u003c\/p\u003e \u003cp\u003eEstimating Equation 189\u003c\/p\u003e \u003cp\u003e5.8.2 Graph of the Linear PAD Model 189\u003c\/p\u003e \u003cp\u003eSummary 196\u003c\/p\u003e \u003cp\u003eKey Terms 196\u003c\/p\u003e \u003cp\u003eList of Formulas 196\u003c\/p\u003e \u003cp\u003eExercises 198\u003c\/p\u003e \u003cp\u003e\u003cb\u003e6 Consumer Demand: Economic Forecasting 200\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e6.1 Forecasting Models 201\u003c\/p\u003e \u003cp\u003e6.1.1 Quantitative Models 201\u003c\/p\u003e \u003cp\u003e6.1.2 Qualitative Models 202\u003c\/p\u003e \u003cp\u003e6.2 Time Series Analysis 202\u003c\/p\u003e \u003cp\u003e6.2.1 Secular Trends 202\u003c\/p\u003e \u003cp\u003e6.2.2 Seasonal Variations 202\u003c\/p\u003e \u003cp\u003e6.2.3 Cyclical Fluctuations 203\u003c\/p\u003e \u003cp\u003e6.2.4 Random Changes 203\u003c\/p\u003e \u003cp\u003e6.3 From Symbolic to Numeric Fitting 203\u003c\/p\u003e \u003cp\u003e6.4 Adjusting for Seasonality 207\u003c\/p\u003e \u003cp\u003e6.4.1 The Simple Average of Errors Method 208\u003c\/p\u003e \u003cp\u003e6.4.2 The Actual-to-Forecast (A\/F) Ratio Method 210\u003c\/p\u003e \u003cp\u003e6.4.3 The Dummy Variables Method 212\u003c\/p\u003e \u003cp\u003e6.5 Smoothed Forecasts 214\u003c\/p\u003e \u003cp\u003e6.5.1 Simple Moving Average Method 214\u003c\/p\u003e \u003cp\u003eThe RMSE Check 217\u003c\/p\u003e \u003cp\u003e6.5.2 The Weighted Moving Average 218\u003c\/p\u003e \u003cp\u003e6.5.3 Exponential Smoothing 219\u003c\/p\u003e \u003cp\u003eMean Absolute Deviation (MAD) 223\u003c\/p\u003e \u003cp\u003e6.6 Barometric Forecasting 224\u003c\/p\u003e \u003cp\u003e6.7 Econometric Models 226\u003c\/p\u003e \u003cp\u003e6.7.1 Single-Equation Model 227\u003c\/p\u003e \u003cp\u003e6.7.2 Multiple-Equation Model 229\u003c\/p\u003e \u003cp\u003e6.8 Input–Output Matrix 231\u003c\/p\u003e \u003cp\u003e6.9 Judgmental Models 233\u003c\/p\u003e \u003cp\u003e6.9.1 Opinions and Polls 233\u003c\/p\u003e \u003cp\u003e6.9.2 Surveys and Market Research 233\u003c\/p\u003e \u003cp\u003e6.10 Forecasting Accuracy and Reliability 234\u003c\/p\u003e \u003cp\u003eSummary 235\u003c\/p\u003e \u003cp\u003eKey Terms 236\u003c\/p\u003e \u003cp\u003eList of Formulas 236\u003c\/p\u003e \u003cp\u003eExercises 238\u003c\/p\u003e \u003cp\u003e\u003cb\u003eUNIT III MANAGERIAL DECISIONS AT THE FIRM LEVEL\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e7 Production Theory 243\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e7.1 Variability of Inputs throughout Time 243\u003c\/p\u003e \u003cp\u003e7.2 Production Function 244\u003c\/p\u003e \u003cp\u003e7.3 Graphical Representation of the Production Function 246\u003c\/p\u003e \u003cp\u003e7.4 Short-Run, One Variable Input Function 250\u003c\/p\u003e \u003cp\u003e7.5 Dynamic Relations among Production Curves 252\u003c\/p\u003e \u003cp\u003e7.6 Law of Diminishing Marginal Returns 260\u003c\/p\u003e \u003cp\u003e7.7 Long-Run, Two Variable Input Function 261\u003c\/p\u003e \u003cp\u003eIsoquants 261\u003c\/p\u003e \u003cp\u003e7.8 Marginal Rate of Technical Substitution (MRTS) 263\u003c\/p\u003e \u003cp\u003e7.9 The Economically Efficient Region of Production 266\u003c\/p\u003e \u003cp\u003e7.10 Returns to Scale 267\u003c\/p\u003e \u003cp\u003e7.11 Elasticity of Substitution 269\u003c\/p\u003e \u003cp\u003e7.11.1 Elasticity of the Cobb–Douglas Production Function 270\u003c\/p\u003e \u003cp\u003e7.11.2 Elasticity of the Leontief Production Function 271\u003c\/p\u003e \u003cp\u003e7.11.3 Leontief Technology and Linear Programming 272\u003c\/p\u003e \u003cp\u003e7.11.4 Elasticity of the Linear Production Function 273\u003c\/p\u003e \u003cp\u003e7.11.5 Elasticity of the CES Production Function 274\u003c\/p\u003e \u003cp\u003e7.11.6 Graphical Representation of CES 275\u003c\/p\u003e \u003cp\u003e7.12 Optimal Employment of an Input 277\u003c\/p\u003e \u003cp\u003e7.13 Technological Progress, Invention, and Innovation 278\u003c\/p\u003e \u003cp\u003e7.14 Technological Progress and Production Function 280\u003c\/p\u003e \u003cp\u003eSummary 282\u003c\/p\u003e \u003cp\u003eKey Terms 283\u003c\/p\u003e \u003cp\u003eList of Formulas 283\u003c\/p\u003e \u003cp\u003eExercises 285\u003c\/p\u003e \u003cp\u003e\u003cb\u003e8 Cost Theory 287\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e8.1 Cost Concepts and Categories 287\u003c\/p\u003e \u003cp\u003e8.2 Short-Run Costs 289\u003c\/p\u003e \u003cp\u003e8.3 The Optimal Combination of Inputs 297\u003c\/p\u003e \u003cp\u003e8.3.1 Isocost 297\u003c\/p\u003e \u003cp\u003e8.4 Minimizing Input Cost and Maximizing Output 298\u003c\/p\u003e \u003cp\u003e8.5 Long-Run Costs 301\u003c\/p\u003e \u003cp\u003e8.6 Short-Run and Long-Run Average Costs: Economies of Scale 303\u003c\/p\u003e \u003cp\u003e8.7 Derivation of the Cost Function 306\u003c\/p\u003e \u003cp\u003e8.8 Economies of Scope: Basic Concept and Cost Complementarities 311\u003c\/p\u003e \u003cp\u003e8.9 Economies of Scope: Synergy and Input Indivisibility 313\u003c\/p\u003e \u003cp\u003e8.10 The Learning Curve 316\u003c\/p\u003e \u003cp\u003e8.11 Cost–Volume–Profit Analysis and Operating Leverage 321\u003c\/p\u003e \u003cp\u003e8.11.1 Break-Even Quantity and Break-Even Revenue 322\u003c\/p\u003e \u003cp\u003eFixed Cost 323\u003c\/p\u003e \u003cp\u003eVariable Cost 323\u003c\/p\u003e \u003cp\u003eContribution Margin 324\u003c\/p\u003e \u003cp\u003e8.11.2 Cash Break-Even Technique 326\u003c\/p\u003e \u003cp\u003e8.11.3 The Break-Even Point and Target Profit 327\u003c\/p\u003e \u003cp\u003e8.11.4 An Algebraic Approach to the Break-Even Point 329\u003c\/p\u003e \u003cp\u003e8.11.5 Break-Even Time 330\u003c\/p\u003e \u003cp\u003e8.11.6 The Dual Break-Even Points 334\u003c\/p\u003e \u003cp\u003e8.12 Leverage 337\u003c\/p\u003e \u003cp\u003e8.12.1 Operating Leverage 338\u003c\/p\u003e \u003cp\u003e8.12.2 Operating Leverage, Fixed Cost, and Business Risk 341\u003c\/p\u003e \u003cp\u003eSummary 342\u003c\/p\u003e \u003cp\u003eKey Terms 344\u003c\/p\u003e \u003cp\u003eList of Formulas 344\u003c\/p\u003e \u003cp\u003eExercises 347\u003c\/p\u003e \u003cp\u003e\u003cb\u003e9 Production and Cost: Estimation and Forecasting 349\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e9.1 Estimation of the Production Function 350\u003c\/p\u003e \u003cp\u003e9.2 Estimation of the Cost Function 352\u003c\/p\u003e \u003cp\u003e9.3 Forecasting Output 355\u003c\/p\u003e \u003cp\u003e9.4 Forecasting Cost 359\u003c\/p\u003e \u003cp\u003e9.5 Meeting Obligations through Decisions with Probabilistic Results 360\u003c\/p\u003e \u003cp\u003eSummary 361\u003c\/p\u003e \u003cp\u003eKey Terms 361\u003c\/p\u003e \u003cp\u003eList of Formulas 361\u003c\/p\u003e \u003cp\u003eExercises 363\u003c\/p\u003e \u003cp\u003e\u003cb\u003eUNIT IV MANAGERIAL DECISIONS AT THE MARKET LEVEL\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e10 Market Structure and Business Organization 367\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e10.1 Perfect Competition 368\u003c\/p\u003e \u003cp\u003e10.1.1 Characteristics of Perfect Competition 368\u003c\/p\u003e \u003cp\u003e10.1.2 Profit Maximization for Competitive Firms 369\u003c\/p\u003e \u003cp\u003e10.1.3 The Decision to Shut Down 373\u003c\/p\u003e \u003cp\u003e10.1.4 The Competitive Firm in the Long Run 377\u003c\/p\u003e \u003cp\u003e10.2 Monopoly 381\u003c\/p\u003e \u003cp\u003e10.2.1 Monopoly’s Equilibrium in the Short Run 381\u003c\/p\u003e \u003cp\u003e10.2.2 Monopoly’s Equilibrium in the Long Run 385\u003c\/p\u003e \u003cp\u003e10.2.3 Monopoly Power and the Lerner Index 388\u003c\/p\u003e \u003cp\u003e10.3 Monopolistic Competition 389\u003c\/p\u003e \u003cp\u003e10.3.1 Monopolistic Competition Equilibrium in the Short Run 390\u003c\/p\u003e \u003cp\u003e10.3.2 Monopolistic Competition Equilibrium in the Long Run 391\u003c\/p\u003e \u003cp\u003e10.4 Oligopoly 393\u003c\/p\u003e \u003cp\u003e10.4.1 The Concentration Ratio and the Herfindahl Index 394\u003c\/p\u003e \u003cp\u003e10.4.2 Models of Oligopoly 395\u003c\/p\u003e \u003cp\u003eCournot Model 395\u003c\/p\u003e \u003cp\u003eStackelberg Model 399\u003c\/p\u003e \u003cp\u003eBertrand Model 403\u003c\/p\u003e \u003cp\u003eSweezy Model 407\u003c\/p\u003e \u003cp\u003eSummary 410\u003c\/p\u003e \u003cp\u003eKey Terms 411\u003c\/p\u003e \u003cp\u003eList of Formulas 411\u003c\/p\u003e \u003cp\u003eExercises 412\u003c\/p\u003e \u003cp\u003e\u003cb\u003e11 Pricing Decisions and Practices 414\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e11.1 Basics of Price Setting 414\u003c\/p\u003e \u003cp\u003e11.2 The Markup Rule 415\u003c\/p\u003e \u003cp\u003e11.3 Multiproduct Pricing Strategies 418\u003c\/p\u003e \u003cp\u003e11.4 Joint Products with Independent Demands 419\u003c\/p\u003e \u003cp\u003e11.4.1 Product Set of Fixed Proportions 419\u003c\/p\u003e \u003cp\u003e11.4.2 Product Set of Variable Proportions 421\u003c\/p\u003e \u003cp\u003e11.5 Transfer Pricing 423\u003c\/p\u003e \u003cp\u003e11.5.1 The Intermediate Product in a Perfectly Competitive Market 424\u003c\/p\u003e \u003cp\u003e11.5.2 The Intermediate Product in an Imperfectly Competitive Market 429\u003c\/p\u003e \u003cp\u003e11.6 Pricing Strategies and Practices 430\u003c\/p\u003e \u003cp\u003e11.7 Price Discrimination 433\u003c\/p\u003e \u003cp\u003e11.7.1 First-Degree Price Discrimination 434\u003c\/p\u003e \u003cp\u003e11.7.2 Second-Degree Price Discrimination 436\u003c\/p\u003e \u003cp\u003e11.7.3 Third-Degree Price Discrimination 437\u003c\/p\u003e \u003cp\u003eSummary 445\u003c\/p\u003e \u003cp\u003eKey Terms 446\u003c\/p\u003e \u003cp\u003eList of Formulas 446\u003c\/p\u003e \u003cp\u003eExercises 447\u003c\/p\u003e \u003cp\u003e\u003cb\u003eUNIT V MANAGERIAL DECISIONS IN THE LONG RUN\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e\u003cb\u003e12 Capital Budgeting and Investment Project Evaluation 451\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e12.1 What is Capital Budgeting? 451\u003c\/p\u003e \u003cp\u003e12.2 Basic Model of Capital Budgeting 453\u003c\/p\u003e \u003cp\u003e12.3 Selection Process and Project Evaluation 454\u003c\/p\u003e \u003cp\u003e12.4 Methods of Evaluation for Proposed Investment Projects 455\u003c\/p\u003e \u003cp\u003e12.4.1 Net Present Value 455\u003c\/p\u003e \u003cp\u003e12.4.2 Internal Rate of Return 459\u003c\/p\u003e \u003cp\u003e12.4.3 NPV versus IRR for Mutually Exclusive Projects 462\u003c\/p\u003e \u003cp\u003e12.4.4 NPV Profile, Crossover Rate, and the Ranking Reversal 465\u003c\/p\u003e \u003cp\u003e12.5 Profitability Index and Capital Rationing 467\u003c\/p\u003e \u003cp\u003e12.6 Payback Method 469\u003c\/p\u003e \u003cp\u003e12.7 Cost of Capital 471\u003c\/p\u003e \u003cp\u003e12.7.1 Cost of Debt Capital 472\u003c\/p\u003e \u003cp\u003e12.7.2 Cost of Equity Capital 473\u003c\/p\u003e \u003cp\u003eThe CAPM Estimation 473\u003c\/p\u003e \u003cp\u003eThe Dividend Valuation Estimation 474\u003c\/p\u003e \u003cp\u003e12.7.3 The Weighted Marginal Cost of Capital 476\u003c\/p\u003e \u003cp\u003e12.7.4 Capitalization and Capitalized Cost 478\u003c\/p\u003e \u003cp\u003e12.7.5 Last Words on the Cost of Capital 481\u003c\/p\u003e \u003cp\u003eSummary 481\u003c\/p\u003e \u003cp\u003eKey Terms 483\u003c\/p\u003e \u003cp\u003eList of Formulas 483\u003c\/p\u003e \u003cp\u003eExercises 485\u003c\/p\u003e \u003cp\u003e\u003cb\u003e13 Risk Analysis and Managerial Decisions under Uncertainty 487\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e13.1 Risk and Uncertainty 487\u003c\/p\u003e \u003cp\u003e13.2 Sources of Risk 488\u003c\/p\u003e \u003cp\u003e13.2.1 Economic Sources 488\u003c\/p\u003e \u003cp\u003e13.2.2 Political Sources 488\u003c\/p\u003e \u003cp\u003e13.2.3 Social Sources 489\u003c\/p\u003e \u003cp\u003e13.2.4 International Sources 489\u003c\/p\u003e \u003cp\u003e13.3 Measurement of Risk 489\u003c\/p\u003e \u003cp\u003e13.3.1 The Absolute Measure 490\u003c\/p\u003e \u003cp\u003e13.3.2 The Relative Measure 495\u003c\/p\u003e \u003cp\u003e13.4 Risk Aversion 495\u003c\/p\u003e \u003cp\u003e13.5 Risk Attitudes and Utility of Money 496\u003c\/p\u003e \u003cp\u003e13.6 Expected Utility of Money versus Expected Monetary Return 498\u003c\/p\u003e \u003cp\u003e13.7 Risk Discount and Certainty Equivalent 501\u003c\/p\u003e \u003cp\u003e13.8 Risk Impact on the Valuation Model 503\u003c\/p\u003e \u003cp\u003e13.8.1 Risk Premium Adjustment 503\u003c\/p\u003e \u003cp\u003e13.8.2 Certainty-Equivalent Adjustment 506\u003c\/p\u003e \u003cp\u003e13.9 Diversifiable versus Nondiversifiable Risk 509\u003c\/p\u003e \u003cp\u003e13.10 Portfolio Risk 510\u003c\/p\u003e \u003cp\u003e13.11 Risk of Two-Asset Portfolio 518\u003c\/p\u003e \u003cp\u003e13.12 Lending and Borrowing at the Risk-Free Rate of Return 520\u003c\/p\u003e \u003cp\u003e13.13 Measuring the Systematic Risk by Beta (β) 522\u003c\/p\u003e \u003cp\u003e13.14 The CAPM Model 525\u003c\/p\u003e \u003cp\u003e13.15 The Security Market Line (SML) 526\u003c\/p\u003e \u003cp\u003e13.15.1 SML Shift by Inflation 527\u003c\/p\u003e \u003cp\u003e13.15.2 SML Swing by Risk Aversion 528\u003c\/p\u003e \u003cp\u003e13.16 Managerial Decision Tree 532\u003c\/p\u003e \u003cp\u003e13.17 Mathematical Simulation and Sensitivity Analysis 533\u003c\/p\u003e \u003cp\u003e13.18 Advanced Choice under Risk, Ambiguity, and Uncertainty 536\u003c\/p\u003e \u003cp\u003e13.18.1 Stochastic Dominance 536\u003c\/p\u003e \u003cp\u003eAssumptions 537\u003c\/p\u003e \u003cp\u003eExpected Utility 537\u003c\/p\u003e \u003cp\u003eFirst-Degree Stochastic Dominance 537\u003c\/p\u003e \u003cp\u003eInterpretation of FSD Conditions 538\u003c\/p\u003e \u003cp\u003eSecond-Degree Stochastic Dominance 538\u003c\/p\u003e \u003cp\u003eInterpretation of FSD Conditions 538\u003c\/p\u003e \u003cp\u003eApplications of SSD Conditions 539\u003c\/p\u003e \u003cp\u003e13.18.2 Choice under Ambiguity 539\u003c\/p\u003e \u003cp\u003e13.18.3 Choice under Uncertainty 539\u003c\/p\u003e \u003cp\u003eSummary 541\u003c\/p\u003e \u003cp\u003eKey Terms 542\u003c\/p\u003e \u003cp\u003eList of Formulas 543\u003c\/p\u003e \u003cp\u003eExercises 544\u003c\/p\u003e \u003cp\u003e\u003cb\u003e14 Management Consultants and Information 546\u003c\/b\u003e\u003c\/p\u003e \u003cp\u003e14.1 Measuring Information and Its Impact on Uncertainty 546\u003c\/p\u003e \u003cp\u003e14.2 Perfect Management Information 548\u003c\/p\u003e \u003cp\u003e14.3 Valuing Perfect Management Information 549\u003c\/p\u003e \u003cp\u003e14.4 Valuing Less-than-Perfect Management Information 549\u003c\/p\u003e \u003cp\u003eSummary 556\u003c\/p\u003e \u003cp\u003eKey Terms 557\u003c\/p\u003e \u003cp\u003eList of Formulas 557\u003c\/p\u003e \u003cp\u003eExercises 558\u003c\/p\u003e \u003cp\u003eAPPENDIX 560\u003c\/p\u003e \u003cp\u003eFURTHER READING 569\u003c\/p\u003e \u003cp\u003eINDEX 573\u003c\/p\u003e  \u003cp\u003e\u003cb\u003eM. J. ALHABEEB, PhD,\u003c\/b\u003e is Professor of Economics and Finance in the Department of Resource Economics at the University of Massachusetts, Amherst. Dr. Alhabeeb has been teaching finance and economics for over thirty years and is a recipient of the Academy of Educational Leadership’s Outstanding Teaching Award for Innovative and Creative Teaching.\u003c\/p\u003e \u003cp\u003e\u003cb\u003eL. JOE MOFFITT, PhD,\u003c\/b\u003e is Professor in the Department of Resource Economics at the University of Massachusetts, Amherst. The author of over fifty journal articles, Dr. Moffitt received his PhD.\u003c\/p\u003e \u003cp\u003eUncertainty is present in every managerial decision, and \u003ci\u003eManagerial Economics: A Mathematical Approach \u003c\/i\u003eeffectively demonstrates the application of higher-level statistical tools to inform and clarify the logic of problem solving in a managerial environment.\u003c\/p\u003e \u003cp\u003eWhile illuminating managerial decision-making from all possible angles, this book equips readers with the tools and skills needed to recognize and address uncertainty. The book also explores individual, firm, and market-level decisions; discusses all possible risks and uncertainties encountered in the decision-making process; and prepares readers to deal with both epistemic and aleatory uncertainty in managerial decisions. \u003ci\u003eManagerial Economics \u003c\/i\u003efeatures:\u003c\/p\u003e \u003cul\u003e \u003cli\u003eAn emphasis on practical application through real-life examples and problems\u003c\/li\u003e \u003cli\u003eAn accessible writing style that presents technical theories in a user-friendly way\u003c\/li\u003e \u003cli\u003eA mathematical and statistical point of view that reveals the presence of uncertainty inherent in managerial decisions\u003c\/li\u003e \u003cli\u003eThoroughly class-tested material including problems at the end of each chapter, case study questions, review exercises, and objectives that summarize the main discussions\u003c\/li\u003e \u003c\/ul\u003e \u003cp\u003e\u003ci\u003eManagerial Economics \u003c\/i\u003eis an excellent book for upper-undergraduate and graduate-level courses in business and economics departments. The book is also an ideal reference and resource for managers, decision makers, market analysts, and researchers who require information about the theoretical and quantitative aspects of the topic.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47989562081509,"sku":"NP9781118091364","price":121.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9781118091364.jpg?v=1761784607","url":"https:\/\/k12savings.com\/es\/products\/managerial-economics-isbn-9781118091364","provider":"K12savings","version":"1.0","type":"link"}