Remember the exam is on Wednesday. You will be asked to respond to chapters 3,4,5,6,7,8. the questions will be mostly problems of the type students did in class, stressing these concepts.
Consumer Theory indifference maps, marginal rate of substitution, budget line, optimality condition (where the consumer makes the optimal choice), substitution and income effect when prices change
Supply and Demand
Estimating Supply and Demand – Q=f(P,other prices, Income, other factors)
Elasticity – Price elasticity of demand, income elasticity of demand, cross elasticity. Elasticity and maximum revenue.
Production functions – isoquants, optimality conditions, calculating with production functions. Re3turns to scale and to a factor. Costs, cost minimization using isoquants and the budget line. Short run and long run cost curves, average cost, average variable cost, marginal cost, relations. the supply curve is the marginal cost line above the TVC line. Factor demand curves. Long run and short run costs.
Market strructure – Perfect competition, Monopoly. How do we find the firm’s optimal quantity and price under these circumstances? what happens when there is a profit under perfect competition? Oligopoly. strategic analysis with Nash equilibrium. cournot duopoly calculation. strategic games and cartels, prisoner’s dilemma, and finding solutions to strategic games by the method of iterated dominance.
Pricing with market power – single pricing (monopoly case). Higher profits througn two part tariff. Price discrimination. Segmented pricing as in Snowfish. Menu pricing, coupons, rebates.
Value Creation and Capture – Transaction costs (reducing them- the effect). Noncooperative pricing of complements, and coordination. Superior factors of production. Why does producer surplus captured by superior assets flow to the assets themselves in the long run?
Hope it helps.
Supply Chain and Logistics 