EC260 Lecture Notes - Lecture 1: Adenosine A2B Receptor, Marginal Revenue, Normal Good
Document Summary
Lesson 1. 1: introduction, math review, and demand theory: introduction. Provides a framework for analyzing managerial actions and their impact on firm performance. Uses formal models to shed light on business concepts such as cost, demand, profit, competition, pricing, compensation, strategic behaviour, etc. Microeconomics"s focus is on the firm or market where managerial economics" focus is on managerial behaviour. Specifies actions a manager can pursue rather than just describing the environment the firm exists within. Provides analytical tools which provide students with the big picture" integrating concepts learned in other business courses. Choose actions that will increase value of their firms over time: Expected net present value of future profit : expected profit in year t = total revenue (tr) total cost (tc) with interest rate i. Decisions limited by operating constraints such as scarce inputs, laws, and contracts. Economists refer to profit over and above what the owners" labourer and capital employed in the business could earn elsewhere (opportunity costs)
