Managerial Economics I
- To provide essential microeconomic tools for the analysis of firms’ strategic behaviour in an uncertain economic environment
- To apply microeconomic theory and methodology to problems faced by decision makers in the private, public and not-for-profit sector
- To understand the economic implications of different market structures, customers behaviour, and market regulation
- To master with economic tools that assist managers in efficiency allocating scarce resources, planning corporate strategy, and executing effective tactics
The course focuses on the following topics:
- The decision-making process, objective and value of the firm, profit maximization, risk and agency problems
- The demand curve, elasticities, and marginal revenue
- The production function and the optimal combination of inputs, allocative and technical efficiency, returns to scale
- Types of costs, short-run and long-run cost functions, minimum efficient scale
- Competitive market structures
- Product differentiation, adverse selection and commitments
- Market power and monopoly behaviour, limit pricing, regulated and natural monopolies
- Basic oligopoly models and collusion
- Strategic games, sequential and repeated games
- First- , second- and third-degree price discrimination, bundling and two-part pricing
The course is made of lectures and tutorials on exercises. Lectures are based on the main textbook. Students are expected to go through the relevant readings before coming to class and are advised to use the textbook. Lecture notes and slides provide important support for revising concepts. Some exercises are discussed during classes (tutorial sessions). Tutorials provide the necessary tools to prepare 4 assignments which will be handed individually by attending students in due time.
The minimum requested attendance is 80% of in-presence hours.
The evaluation of the course is composed of the grade for the written exam at the end of the semester and 4 assignments with numerical exercises (for attending students). Assignments account for 20% of the final grade (each handed assignment will get 5%). The final exam is made of multiple-choice questions on both theoretical aspects and numerical exercises.
The main textbook is:
McGuigan, Moyer, Harris, Managerial Economics: Applications, Strategies and Tactics (14th ed.), 2017.
Students have to cover Chapters 1-3, 7-8, and 10-14.
Supporting slides include the structure and the basic concepts of each lecture and should guide the study. These are available on the course website (iCorsi platform), together with exercise series and solutions.