Week Three Student Guide
This week’s topics include how supply and demand, revenue, profit maximization, and the various cost concepts apply to different market structures. When introducing the market structures, the readings and discussions illustrate why different firms might utilize different techniques to increase business—that is, which business types would utilize pricing strategies and nonprice strategies to meet goals, which businesses need to consider advertising and what type of advertising, and which businesses may need to consider cost-reduction strategies to improve profitability.
OBJECTIVE: Determine pricing strategy to meet organizational goals.
Resource: Ch. 9–11 of Economics
• Ch. 9: Pure Competition
o Four Market Models
o Pure Competition: Characteristics and Occurrence
o Demand as Seen by a Purely Competitive Seller
o Profit Maximization in the Short Run: Total-Revenue–Total-Cost Approach
o Profit Maximization in the Short Run: Marginal-Revenue–Marginal-Cost Approach
o Marginal Cost and Short-Run Supply
o Profit Maximization in the Long Run
o Pure Competition and Efficiency
• Ch. 10: Pure Monopoly
o An Introduction to Pure Monopoly
o Barriers to Entry
o Monopoly Demand
o Output and Price Determination
o Economic Effects of Monopoly
o Price Discrimination
o Regulated Monopoly
• Ch. 11: Monopolistic Competition and Oligopoly
o Monopolistic Competition
o Price and Output in Monopolistic Competition
o Monopolistic Competition and Efficiency
o Product Variety
o Oligopoly Behavior: A Game-Theory Overview
o Three Oligopoly Models
o Oligopoly and Advertising
o Oligopoly and Efficiency
OBJECTIVE: Determine ways to create nonprice barriers to entry based on market structure.
Resource: Ch. 10 of Economics
• Ch. 10: Pure Monopoly...