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Welcome!
Managerial Economics is a field of Economics that analyzes business decisions. Managerial Economics allows business owners to answer the questions “How much should I produce?” and “What price should I charge?”. However, there is much more to Managerial Economics than simply determining the optimum price and quantity that a firm should produce. Managerial Economics also allows us to determine how our business will be affected by changes in the production of other businesses. It allows us to predict the impact that certain government legislation will have on our business. This course will examine business decisions from both the perspective of the supplier and the consumer.
Topics Covered
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Market Equilibrium
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Price Controls
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Law of Supply and Demand
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Indifference Curves and Budget Constraints
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Elasticity of Demand
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Isoquant and Isocost Curves
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Minimizing Cost of Production
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Market Structure
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Pricing Strategies
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Benefits of Mergers
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Employee Incentives
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Time Value of Money
About the Instructor
Robert Reed is a current Masters of Business Administration candidate and veteran with four years of service in the 82nd Airborne Division of the United States Army. He holds a B.A. in Economics and has served as a student tutor for three years.
*This course is not intended to give any specific business advice or investment advice, but rather represents an introduction to Managerial Economics that is designed to help you better understand the key concepts. *
Supply and Demand
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1Introduction
Welcome to the course! This is a brief introduction to the course, the topics we will cover, and the course outcomes.
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2Fundamental Terms
Welcome to Managerial Economics. In this first lesson, we will discuss some fundamental concepts of Managerial Economics.
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3Time Value of Money
In this lesson, we discuss the time value of money. Learn why a dollar today is more valuable than a dollar tomorrow and how companies account for this difference between present value and future value.
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4Project Profitability Index
This lesson is an extension of the present value calculation. The project profitability index allows us to compare two investments when the net present value of both is the same.
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5Value of Perpetuity
In this lesson, we calculate the present value of a stream of infinite payments. This situation can arise when a company or business purchases an annuity, or when a business investment can be made in the present, but will yield dividends into the foreseeable future.
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6Quiz 1
Analyzing Demand
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7Introduction to Supply and Demand
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8Demand Function
In this video, we will discuss the Law of Demand. The law of demand is a fundamental principle of Economics.
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9Consumer Surplus
In this video, we will discuss consumer surplus. Consumer surplus is a term used to describe value that consumers get from purchasing a product.
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10Law of Supply
In this lesson, we will discuss the Law of Supply. The Law of Supply is similar to the Law of Demand, but describes how producers are willing to produce more at higher prices.
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11Market Equilibrium
Market equilibrium is a term that describes the intersection of the demand and supply curves. In this lesson, we will examine the concept of market equilibrium. Additionally, we will use demand and supply curves to calculate market price and quantity sold.
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12Equilibrium Analysis Continued
In this lesson, we continue our analysis of equilibrium markets and learn how to calculate producer surplus from the supply function.
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13Price Ceiling
In this video we will learn about a price ceiling and how it affects market price and quantity.
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14Price Floor
In this lesson, we examine the effects of a price floor on market quantity and price.
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15Quiz 2
Production
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16Introduction to Demand
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17Elasticity of Demand
Elasticity of demand refers to how the change in one variable (price, price of competitors goods, etc. ) affects quantity.
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18Deriving Elasticity of Demand
In this lesson, we will take a more advanced look at elasticity. We will learn how to calculate elasticity from the demand function, and we will also learn how to derive elasticity using basic calculus.
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19Cross Price Elasticity
In this lesson, we will discuss additional types of elasticities. We will learn how the formula for elasticities can be expanded to encompass variables such as marketing expenditures or income.Â
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20Deriving the Demand Function
The demand function is critical for understanding market price and quantity. In this video, we will learn how economists estimate the demand function with regression analysis.
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21Interpreting Regression Output
In this video, we will learn how to interpret a regression output. Is the model useful? How good of a model does the regression equation provide?
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22Indifference Curves
In this video, we will learn about indifference curves and the marginal rate of substitution.
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23Budget Constraints
This video discusses budget constraints and how consumers attempt to maximize utility given limited resources.
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24Consumer Satisfaction
This video discusses the concept of an indifference curve.
Market Structure
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25Introduction to Supply
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26Introduction to Production
In this lesson, we will discuss the basics of production. We will learn the differences between fixed, variable, and sunk costs.
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27Practical Example: Break Even Point
This example uses a craft fair to illustrate the concept of a break even point and contribution margin.
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28Introduction to Production Function
In this video, we will discuss the basics of a production function. We learn how different amounts of inputs can lead to different quantity of outputs. By the end of the lecture, you will understand the importance of Marginal Product of Labor.
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29Optimal Inputs
In this lesson, we will explore how firms choose the optimal amount of a certain input. We will continue to explore the production function by learning exploring the interaction between the Value of Marginal Product of Labor (VMPL) and the Wage Rate (W),
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30Isoquant
In this video, we will discuss the importance of Isoquant Curves. Isoquants allow us to see how a business can produce the same level of output while using different combinations of capital and labor.
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31Isocost
In this lesson, we will discuss the Isocost Curve. This curve allows us to see how the cost of production is expressed in terms of different inputs.
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32Cost Minimizing Input
In this video we will put together the Isocost and Isoquant curves to see how managers can choose the proper mix of capital and labor to minimize costs.
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33Cobb-Dougals Production Function
This video discusses the application of the Cobb-Douglas production function.
Firm Organization and Strategy
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34Introduction to Market Structure
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35Perfect Competition
This lesson discusses the basics of perfect competition. Understanding the perfectly competitive market structure will give you a foundation for understanding other types of market structures.
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36Monopoly
In this lesson, we will learn about a monopoly and how it uses its market power to enhance profits.
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37Lerner and Rothschild Index
In this lesson, we will learn about two measures of relative market power.
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38Market Concentration
In this lesson, we will discus two ways of measuring the concentration of an industry.
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39Monopolistic Competition
In this lesson, we will learn how a monopolistic competition market structure operates.
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40Oligopoly
In this lesson, we will discuss four types of oligopolies and the implications of each different type.
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41Price Discrimination
In this lesson, we will learn how firms with market power can use pricing strategies to increase profits and producer surplus.
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42Quiz 3
Summary
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43Introduction to Organization and Strategy
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44Integration
This lesson will discuss vertical and horizontal integration as well as conglomerate mergers.
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45Vertical Integration and the Cost of Inputs
In this lesson, we will learn about the costs of inputs and the concept of vertical integration.
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46Incentives for Performance
In this lesson, we will learn how managers can use performance incentives to maximize employee potential.
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47The Shutdown Rule
In this lesson, we will learn about perfect competition and the shutdown rule. In some circumstances, the firm should keep producing even when it is operating at a loss.