BUS 530 Module 1 Case
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module_1_information.pdf
Module 1 - Home
THE DEMAND AND SUPPLY MODEL
Modular Learning Outcomes
Upon successful completion of this module, the student will be able to satisfy the following outcomes:
• Case o Analyze the market as a mechanism of resource
allocation, evaluate the main comparative statics propositions, and appraise the role of profits and prices in the market economy.
o Analyze the demand and supply model of price determination.
o Analyze the pricing implications of the price elasticity of demand.
• SLP o Analyze the tools of managerial economics as applied
to your chosen firm. o Evaluate the dynamics of demand and supply and the
role of prices and the drive to profit maximization. • Discussion o Evaluate the cost and benefits of a market economy. o Analyze how prices adjust to shifts in the determinants
of the underlying determinants of demand and supply structures.
Module Overview
Module 1 is a general introduction to profits, markets, and the role of managers in a market economy. Module 1 introduces the student to the main tools of managerial economics:
• Tools of economic theory: competitive markets, marginal analysis, profit maximization, and comparative statics.
• Tools of econometrics: regression analysis and forecasting. • Integrate the informational content of price elasticity of demand
into the theory of profit maximization.
Module 1 - Background
THE DEMAND AND SUPPLY MODEL
Case Assignment Readings
Required Reading
Bhat, M.S., and Rau, A.V. Managerial Economics and Financial Analysis, Hyderabad, IND BS Publications, 2008. ProQuest ebrary. Web. Retrieved August 18 2014Chapter 1: Introduction to Managerial Economics, pp 1-15.
Townsend, H. Foundations of Business Economics, Market and Prices. London, GBR: Routledge, 1995. ProQuest ebrary. Web. Retrieved August 12, 2014. Chapter 1: The Economic Way of Thinking, pp 3-17 and Chapter 2: Firms, Markets and Industries, pp 21- 30.
Optional Reading
Vasigh, B. , Vasigh, B., and Tacker, T. Introduction to Air Transport Economics: From Theory to Applications. Famhan, GBR: Ashgate Publishing Ltd, 2013. ProQuest ebrary. Web. Retrieved August 12, 2014. Chapter 2: Principles of Economics with Application in Aviation, pp.27-38 and Chapter 3, Supply and Demand: Analysis in the Airline Industry, pp 46-67.
Thomas, C.R., and Maurice, S.C., Managerial Economics, McGraw Hill (2008) Power Point Presentation available athttp://highered.mheducation.com/sites/0073402818/student _view0/chapter1/powerpoint_presentation.html
Milton Friedman discussion of the power of the market in the famous piece on the lesson of the pencil
(nobody can make a pencil): http://www.youtube.com/watch?v=R5Gppi-O3a8
Links to Demand, Supply, and Market Equilibrium
Required Reading
Thomas, C.R., and Maurice, S.C., Managerial Economics, McGraw Hill (2008) Power Point Presentations available athttp://highered.mheducation.com/sites/0073402818/student _view0/chapter2/powerpoint_presentation.html
http://highered.mheducation.com/sites/0073402818/student_ view0/chapter3/powerpoint_presentation.html
Optional Reading
MRUniversity. (2015, Jan. 12). The Demand Curve [Video file]. Retrieved fromhttps://www.youtube.com/watch?v=kUPm2tMCbGE
Links to Marginal Analysis
Required Reading
Thomas, C.R., and Maurice, S.C., Managerial Economics, McGraw Hill (2008) Power Point Presentation available athttp://highered.mheducation.com/sites/0073402818/student _view0/chapter4/powerpoint_presentation.html
Optional Reading
Econimicsfun. (2009, April 13). Economics Marginal Analysis Economics [Video File]. Retrieved from https://www.youtube.com/watch?v=z9XgcXz1Uzo
Links to price elasticity of demand
Required Reading
Thomas, C.R., and Maurice, S.C., Managerial Economics, McGraw Hill (2008) Power Point Presentation available at: http://highered.mheducation.com/sites/0073402818/stude nt_view0/chapter6/powerpoint_presentation.html
Optional Reading
DeSpentDatMoney2. (2012, April 21). Price Elasticity of Demand [Video file]. Retrieved fromhttps://www.youtube.com/watch?v=VhKI8cOaYLI
Vasigh, B., Vasigh, B., and Tacker, T. Introduction to Air Transport Economics: From Theory to Applications. Famhan, GBR: Ashgate Publishing Ltd, 2013. ProQuest ebrary. Web. Retrieved August 12, 2014. Chapter 3: Supply and Demand: Analysis in the Airline Industry, pp 81-92.
QuickMBA presentation available at http://www.quickmba.com/econ/micro/elas/ped.shtml
NetMBA presentation available at http://www.netmba.com/econ/micro/demand/elasticity/pric e/
Lancaster, K (1966). A New Approach to Consumer Theory, Journal of Political Economy 74, 132-157.
For the computation of the price elasticity of demand, see the attached Excel file.
SLP Assignment Reading
Townsend, H. Foundations of Business Economics, Market and Prices. London, GBR: Routledge, 1995. ProQuest ebrary. Web. Retrieved August 12, 2014. Chapter 1: The Economic Way of Thinking, pp 3-17 and Chapter 2: Firms, Markets and Industries, pp 21- 30.
