第一篇 导论...........................................1
第1章 管理经济学的性质和研究范围.............3
1.1 管理经济学的研究范围.................4
1.2 决策的基本过程.......................7
1.3 厂商理论............................10
1.4 利润的性质和作用....................15
1.5 商业道德............................19
1.6 管理经济学的国际框架................22
1.7 管理经济学与互联网..................26
本章小结.................................27
练习题...................................28
第1章附录： 需求、供给和均衡的基本概念....30
补充阅读材料.............................36
互联网网址...............................37
第2章 最优化技术和新型管理工具..............38
2.1 表述经济关系的方式..................39
2.2 总量、平均和边际之间的关系...........41
2.3 最优分析............................44
2.4 约束条件下的最优....................47
2.5 最优化的新型管理工具................48
2.6 其他管理工具........................56
2.7 新型管理工具和职能专门化............57
本章小结.................................60
练习题...........................................60
补充阅读.........................................61
互联网网址.......................................62
综合案例1 迈克尔·戴尔的教育......................63
第二篇 需求分析..............................................67
第3章 需求理论.....................................69
3.1 产品的需求..................................71
3.2 需求的价格弹性..............................79
3.3 需求的收入弹性..............................88
3.4 需求的交叉价格弹性..........................91
3.5 弹性在管理决策中的应用......................94
3.6 偏好的国际融合..............................97
3.7 电子商务....................................99
本章小结........................................104
练习题..........................................105
第3章附录：消费者选择理论—— 市场需求曲线背后
的原理..............................108
补充阅读材料....................................114
互联网网址......................................114
第4章 需求估计....................................115
4.1 识别问题...................................117
4.2 需求估计的销售调研方法.....................119
4.3 回归分析的引入.............................125
4.4 简单回归分析...............................128
4.5 多元回归分析...............................137
4.6 回归分析中的问题...........................142
4.7 通过回归分析进行需求估计...................145
4.8 估计美国进出口的需求.......................149
本章小结........................................153
练习题..........................................154
第四章附录： 用EXCEL做的回归分析................157
补充阅读材料....................................161
互联网网址......................................162
第5章 需求预测.....................................163
5.1 定性预测...................................165
5.2 时间-序列分析..............................168
5.3 平滑技术...................................177
5.4 气压法.....................................182
5.5 经济模型...................................186
5.6 投入-产出的预测............................192
本章小结........................................192
练习题..........................................193
第5章附录： 利用电子表格进行时间序列分析
来预测波动..........................196
补充阅读材料....................................200
互联网网址......................................201
综合案例2 美国电力需求的估计和预测.................202
第三篇 生产和成本分析.......................................205
第6章 生产理论与估计..............................207
6.1 生产组织和生产函数.........................209
6.2 一种可变生产要素的生产函数.................212
6.3 可变要素的最优使用量.......................217
6.4 两种可变要素的生产函数.....................220
6.5 最优的生产要素组合.........................225
6.6 规模报酬...................................232
6.7 经验生产函数...............................235
6.8 创新过程...................................238
6.9 创新和全球竞争.............................241
本章小结........................................245
练习题..........................................247
第6章附录： 生产的微积分分析....................249
补充阅读材料....................................252
互联网网址......................................252
第7章 成本理论与估计..............................253
7.1 成本的性质.................................254
7.2 短期成本函数...............................256
7.3 长期成本曲线...............................260
7.4 厂房大小和规模经济.........................265
7.5 学习曲线...................................268
7.6 在国际范围内最小化成本——新型规模经济.....271
7.7 物流或供应链管理...........................275
7.8 本—量—利分析和经营杠杆...................276
7.9 成本函数的经验估计.........................282
本章小结........................................289
练习题..........................................290
第7章附录： 用微积分进行成本分析.................292
补充阅读材料....................................294
互联网网址......................................295
综合案例3 石油工业的生产和成本函数.................296
第四篇 市场结构与定价实践...................................299
第8章 市场结构： 完全竞争、垄断和垄断竞争........301
8.1 市场结构和竞争程度.........................302
8.2 完全竞争...................................303
8.3 全球经济中的竞争...........................312
8.4 垄断.......................................317
8.5 垄断竞争...................................325
本章小结........................................331
练习题..........................................332
第8章附录： 微积分法求解利润最大化..............335
补充阅读材料....................................337
互联网网址......................................338
第9章 寡头垄断和企业架构..........................339
9.1 寡头垄断和市场集中度.......................340
9.2 寡头垄断模型...............................344
9.3 寡头垄断的收益及效率的含义.................353
9.4 销售额最大化模型...........................357
9.5 全球寡头的进行曲...........................359
9.6 理想企业架构和创造性公司...................364
9.7 虚拟企业和关系企业.........................369
本章小结........................................372
练习题..........................................373
第9章附录： 应用数学方法研究寡头理论............374
补充阅读材料....................................382
互联网网址......................................383
第10章 博弈论和战略行为...........................385
10.1 战略行为和博弈论..........................386
10.2 占优战略和纳什均衡........................388
10.3 囚徒困境..................................391
10.4 价格和非价格竞争，卡特尔欺骗与囚徒困境....392
10.5 重复博弈和针锋相对战略....................395
10.6 战略措施..................................396
10.7 战略行为与国际竞争........................399
10.8 连续博弈和决策树..........................402
本章小结........................................405
练习题..........................................405
补充阅读材料....................................408
互联网网址......................................408
第11章 定价实践...................................410
11.1 多种产品定价法.............................411
11.2 价格歧视..................................419
11.3 国际价格歧视与倾销........................426
11.4 转移定价..................................428
11.5 定价实践..................................435
本章小结........................................445
练习题..........................................446
第11章附录： 用微积分分析三级价格歧视...........448
补充阅读材料.....................................451
互联网网址......................................452
综合案例4 eBay和网络竞争...........................453
综合案例5 设计飞机票价的艺术.......................455
第五篇 管制、风险分析和资本预算............................459
第12章 管制与反托拉斯： 政府在经济中的作用........461
12.1 支持企业，保护消费者、工人以及环境的
政府管制..................................462
12.2 外部性和管制..............................468
12.3 公共事业管制..............................473
12.4 反托拉斯： 政府对市场结构和行为方式的管制...476
12.5 反托拉斯法的实施和放松管制运动............476
12.6 对国际竞争的管制..........................485
12.7 企业决策的税收效应........................488
本章小结........................................490
练习题..........................................491
补充阅读材料....................................493
互联网网址......................................495
第13章 风险分析...................................496
13.1 管理决策中的风险和不确定性................498
13.2 用概率分布度量风险........................499
13.3 效用理论和风险厌恶........................508
13.4 调整风险的评估模型........................512
13.5 结合风险进行决策的其他技术................517
13.6 不确定性下的决策..........................520
13.7 外汇风险和对冲保值........................524
13.8 信息和风险................................528
本章小结........................................534
练习题..........................................535
补充阅读材料....................................539
互联网网址......................................540
第14章 长期投资决策： 资本预算....................541
14.1 资本预算： 概述............................542
14.2 资本预算过程..............................546
14.3 资本配给与盈利指数........................551
14.4 资本成本..................................554
14.5 实施投资项目后的评价......................559
14.6 资本成本与国际竞争力......................562
本章小结........................................563
练习题..........................................564
补充阅读材料....................................567
互联网网址......................................568
综合案例6 放松管制、风险、资本预算与电信危机.......569
附录A 复利计算、折现和现值.........................575
附录B 利息系数表.............. .....................581
附录C 统计表.............................. ..........586
CONTENTS
. CHAPTER 1 The Nature and Scope of Managerial
Economics 3
1-1 The Scope of Managerial Economics 4
Definition of Managerial Economics 4
Relationship to Economic Theory 6
Relationship to the Decision Sciences 6
Relationship to the Functional Areas of Business Administration Studies 7
1-2 The Basic Process of Decision Making 7
CASE STUDY 1-1 The MQn Who inventsd MQnQgement 9
CASE STUDY 1-2 The MQnQgementRevolution 10
1-3 The Theory of the Firm 10
Reasons for the Existence of Firms and Their Functions I I
The Objective and Value of the Firm I I
Constraints on the Operation of the Firm 13
Limitations of the Theory of the Firm 14
1-4 The Nature and Function of Proms 15
Business versus Economic Profit 15
Theories of Profit 16
Function of Profit 17
CASE STUDY 1-3 Profits in the P6rsonQI COrn putsrlndustry 18
1-S Business Ethics 19
CASE STUDY 1-4 Business Ethics QtBoeing 20
CASE STUDY 1-5 ERron--Andersen and OtherFinonciol Di5Qstsrs 21
XI
..
XII COntents
1-6 The international Frameworkof Managerial Economics 22
CASE STUDY 1-6 The RiSe of the Global COrporotl'On 23
CASE STUDY 1-7 The GIobQI Business Leoder 24
CASE STUDY 1-8 GIobol MostAdml'red COmpanies 25
1-7 Managerial Economics and the Internet 26
CASE STU DY 1 -9 The Most ImpoFtQnt nit6met Sits Addresses
forMQnageriOI EConomics 27
Summary 27
y 27
Problems 28
Appendix to Chapter l: The Basics of Demand, Supply,
. -.....
and Equilibrium 30
The Demand Side of the Market 30
The Supply Side of the Market 31
pply Side of the Market 31
The Equilibrium Price 31
shift in the Demand Curve and Eauilibrium 32
shift in the Demand Curve and Equilibrium 32
1
shift in the Suprilll Curve and Eauilibrium 32
shift in the Supply Curve and Equilibrium 32
CASE STUDY 1-10 Changes I'n DemQnd andSupplyQnd the Price OIPCS 34
CASE STUDY 1 -11 Changes I'n Demand and supply Qnd COffee Prices 35
Appendix Problems 35
Supplementary Readings 36
Internet Site Addresses 37
. CHAPTER 2 Optimization T6chniques and New
ManagementTOots 38
-. .. ... r -. -. o. 1
2-1 Methods of EXpressing Economic Relationships 39
~ - -.. *. .... o. I
2-2 TOtal, Average, and Marginal Relationships 41
Total, Average, and Marginal Cost 41
Geometric Derivation of the Average- and Marginal-Cost Curves 43
~ - rt'..'.... K
2-3 OptimizationAnalysis 44
Profit Maximization by the Total-Revenue and TOtal-Cost Approach 44
J pproach 44
Optimization by Marginal Analysis 45
CASE STUDY 2-1 OPtimoIPOllution COntFOI 46
~ f.
2-4 Constrained Optimization 47
CASE STUDY 2-2 Pursuing MultiPle Obl'ectives under COnstFQintS by GIobol
COrporotions 47
~ - ...
2-5 New ManagementTOols for Optimization 48
Benchmarking 49
Total Quality Management 49
Contents Xiii
CASE STUDY 2-3 senchmQrking atX6FOX, FOrd, QndMobil 50
Reengineering 51
.ineenng 51
CASE STUDY 2-4 TOtQI QUQlityManQgementin the ReQI WOrld 52
CASE STUDY 2-5 Reengineering at GE 53
The Learning Organization 54
CASE STUDY 2-6 Applyl'ng LeQming-OrgQniZOtl'on Princl'Ples ot FOrd cud
southwestAiriines 55
2-6 Other ManagementTOols for Optimization 56
- - k. ..
2-7 New ManagementTOols and Functional Specialization 57
CASE STUDY 2-7 TheAmerl'cQn Business Model 58
CASE STUDY 2-8 When GovemQnce Rules Foil, PUblic TrUst iS Eroded 59
SummarV 60
y 60
Problems 60
Supplementary Readings 61
Internet Site Addresses 62
INTEGRATING CASE STUDY 1: The Education olMichQel Dell 63
. CHAPTER 3 DemandTheory 69
o. -t rs. r
3-1 The Demand for a Commodity 71
Y 71
An individual's Demand for a CommoditV 71
y / I
From individual to Market Demand 74
The Demand Faced by a Firm 75
J a Firm 75
CASE STUDY 3-1 The DemQndforBI'g Moos 76
~ ~ ac. -.'..
3-2 Price Elasticity of Demand 79
y of Demand 79
Point Price ElasticitV of Demand 79
7
Arc Price Elasticity of Demand 81
7
Price ElasticitV, Total Revenue, and Marginal Revenue 82
;, lotal Revenue, and Marginal Revenue 82
Factors Affecting the Price Elasticity of Demand 85
CASE STUDY 3-2 Pn'ce Elostl'citl'es OIDemand in the Real WOrld 87
- -. -.
3-3 Income Elasticity of Demand 88
y of Demand 88
CASE STUDY 3-3 Income Elastl'cities Of DemQnd in the Red WOrld 90
o'
3-4 Cross-Price ElasticitV of Demand gi
y of Demand gi
CASE STUOY 3-4 Cross-Price Elostl'citl'es of Demand I'n the Red WOrld 93
CASE STUDY 3-5 substl'tUtl'On beaten Domestl'c Qnd FOrel'gn Goods 94
o -... -.
3-5 Using Elasticities in Managerial Decision Making 94
.
XIV COntents
3-6 International Convergence of T8stes 97
CASE STUDY 3-6 Gilleds intFOduces the sensor Qnd MQch3 Razors--TwO
TrulyGlobol ProductS 97
CASE STUDY 3-7 FOrd'S WOrld Car(S) 98
~ - -. 1.
3-7 ElectronicCommerce 99
CASE STUDY 3-8 E-COmmerce QtAmozon.com 102
CASE STUDY 3-9 eBQy Qnd some nit6met V6t6rans
Are CQShing in 103
Summary 104
y 104
Problems 105
Appendix to Chapter 3: Behind the Market Demand Curve--The
Theory of Consumer Choice 108
y of Consumer Choice 108
The Consumer's Tastes: Indifference Curves 108
The Consumer's Constraints: The Budget Line 109
The Consumer's Equilibrium 1 10
Derivation of the Consumer's Demand Curve 1 10
Income and Substitution Effects of a Price Change 1 11
The Theory of Consumer Choice Mathematically 1 13
J J 113
Appendix Problems 113
Supplementary Readings 114
Internet Site Addresses 114
. CHAPTER 4 Demand Estimation 115
4-1 The identification Problem 117
4-2 Marketing Research Approaches to Demand Estimation 119
Consumer Surveys and Observational Research 1 19
; a and Observational Research 1 19
Consumer Clinics 120
Market Experiments 120
CASE STUOY 4-1 MicromQrketing: Morketsrs Z8ro I'n on Their
customers 121
Virtual Shopping and Virtual Management 122
CASE STUDY 4-2 EStl'motl'on Olthe DemQndfor Oranges byMorket
boeriment 123
penment 123
CASE STUDY 4-3 R8aching COnsumers in the VQnl'Shing Moss
MQrket 124
4-3 Introduction to Regression Analysis 125
4-4 Simple Regression Analysis 128
The Ordinary Least-Sauares Method 128
; Least-Squares Method 128
Tests of Significance of Parameter Estimates 130
COntents xv
Other Aspects of Significance Tests and Confidence intervals 132
Test of Goodness of Fit and Correlation 133
4-5 Multiple Regression Analysis 137
The Multiple Regression Model 137
,.
The Coefficient of Detendnation and Adjusted RZ 139
,usted RZ 139
Analysis of Variance 140
, als of Variance 140
Point and interval Estimates 141
4-6 Problems in Regression AnalySis 142
Multicollinearitv 142
J
Heteroscedasticitv 142
J
Autocorrelation 144
4-7 Demand Estimation by Regression Analysis 145
y Regression Analysis 145
Model Specification 145
Collecting Data on the Vocables 146
Rriecifllinq the Form of the Demand Eol'otion 146
specifying the Form of the Demand Equation 146
'
Testing the Econometric Results 148
CASE STUDY 4-4 EStl'mQtion Of the DemondforAir TrQvel over the NoFth
Atlantic 148
4-8 Estimatingthe Demand for U.S. imports and EXports 149
CASE STUDY 4-5 Price and income Elasticities of importS cud abortS
.
in the R8ol WOrld IS0
CASE STUDY 4-6 The MQjor COmmodity abortS cud ImportS of
me united Slotes 151
CASE STUDY 4-7 The TOP U.S. Intsmotional aborters 152
SummarV 153
y 153
Problems 154
Appendix to Chapter 4: Regression Analysis with Excel 157
cimDle ReZression 157
dimple Regression 157
pie Regression 157
MultiDle Repression Analysis 160
pie Regression Analysis 160
Supplementary Readings 161
Internet Site Addresses 162
. CHAPTER 5 Demand Forecasting 163
5-1 Qualitative FOrecasts 165
c''rvelr Techniques 165
ourveV Techniques 165
y fechniques 165
Opinion Polls 166
criliciting a Foreign PersDoritllr
soliciting a Foreign Perspective 167
CASE STUDY S-1 FOrecasting the NumberofMcDonold'S ReStourontS
WOrldwide 168
.
XVI COntents
5-2 Time-SeriesAnalysis 168
Reasons for Fluctuations in Time-Series Data 169
Trend Protection 171
section 171
R I Variations 173
reasonal Variations 173
CASE STUDY 5-2 FOrecosting New-Housing stQftS with Time-series
AnalysiS 176
y5Is 176
5-3 SmoothingT6chniques 177
Moving Averages 177
Exponential Smoothing 179
CASE STUDY 5-3 FOreCQSting LumberSQles wl'th smoothl'ng
T8chniques 181
5-4 BarometricMethods 182
CASE STUDY S-4 FOreCQSting the Level OIEConomicActl'vity
with COrn posits Qnd DiffuSI'On indexeS 185
CASE STUDY 5-5 The index Of LeQding indicQtors
Goes Global 186
5-5 EconometricModels 186
finale-Eauation Models 187
jingle-Equation Models 187
CASE STUDY 5-6 FOrecasting the DemQnd forAir TrQvel over the North
AtIQntl'c 187
Multiple-Equation Models 188
CASE STUDY 5-7 EConomic FOreCQSts with LQrge ECOnometrl'c
MOdelS 190
CASE STUOY 5-8 RI'sks in DemQnd FOreCQsting 191
5-6 Input-OutputFOrecasting 192
SummarV 192
y 192
Problems 193
Appendix to Chapter 5: FOrecasting Fluctuations in Time-Series
Analysis Using EXcel 196
ysis Using EXcel 196
Forecasting New-Housing Starts with Regression Analysis 196
Adjusting the Trend Forecasts of New-Housing Starts for Seasonal Vacations
,usting the Trend Forecasts of New-Housing Starts for Seasonal Vacations
bV the Ratio-to-Trend Method 198
y [he Ratio-to-Trend Method 198
Adjusting the Trend Forecasts of New-Housing Starts for Seasonal Variations
,usting the Trend Forecasts of New-Housing Starts for Seasonal Variations
bV Using Seasonal Dummies 200
y Using Seasonal Dummies 200
Supplementary Readings 200
Internet Site Addresses 201
INTEGRATING CASE STUDY 2: EStimQting cud FOrecosting
the U.S. DemQndlorElectrl'city 202
Contents xvii
. CHAPTER 6 Production Theoryand Estimation 207
6-1 The Organization of Production and the Production
Function 209
The Organization of Production 209
The Production Function 210
6-2 The Production Function with OneV&riable input 212
Total, Average, and Marginal Product 213
The Law of Diminishing Returns and Stages of Production 215
6-3 Optimal Use oftheV8riable input 217
6-4 The Production Function with TwoV8riable Inputs 220
Production Isoquants 220
Economic Region of Production 220
Marginal Rate of Technical Substitution 222
Perfect Substitutes and Complementary inputs 224
6-5 Optimal Combination of inputs 225
Isocost Lines 226
Optimal input Combination for Minimizing Costs or Maximizing
Output 227
Profit Maximization 229
Effect of Change in input Prices 229
CASE STUDY 6-1 substl'tUtobility beaten GQsoline COnsumptl'on
ondDrivi'nq TI'me 230
a TI'me 230
6-6 Returns to Scale 232
CASE STUDY 6-2 RetUrns tO Scale in U.S. MQnufactUrl'ng industrl'es 233
CASE STUDY 6-3 Generol Motors Decides Smaller iS seaer 234
6-7 Empirical Production Functions 235
CASE STUDY 6-4 OutputElosticitl'es in U.5. MonulQctUring
Industries 236
6-8 The Innovation Process 238
Meaning and Importance of innovations 238
CASE STUDY 6-5 HowDo Firms GetNew T6chnology? 239
The Open innovation Model 240
6-9 Innovation and 6lobal Competitiveness 241
Innovations and the international Competitiveness of U.S. Firms 241
CASE STUDY 6-6 HowX8rox Lostand RegQI'ned intsmQtional
COmDetitiveness and Become o LeQder in informQtion T8chnology 242
petitiveness and Become o LeQder in In!OrmQtion T8chnology 242
CASE STUDY 6-7 The NewU.5. DI'gitOI Factory 243
...
xviII COntents
CASE STUDY 6-8 The Euro Qnd the nit6mQtionol COrn petitl'veness Of
EUropeQn FI'rms 244
The New Computer-Aided Production Revolution and the international
Competitiveness of U.S. Firms 245
Summary 245
y 245
Problems 247
Appendixic Chapter 6: Production Analysis with Calculus 249
Constrained Output Maximization 249
Constrained Cost Minimization 250
Profit Maximization 250
Appendix Problems 251
Supplementary Readings 252
Internet Site Addresses 252
. CHAPTER 7 CostTheorV and Estimation 253
y and Estimation 253
7-1 The Nature of Costs 254
- ~ -.'
7-2 Short-Run Cost FunctionS 256
qhoft-Run TOtal and Per-Unit Cost Functions 256
short-Run TOtal and Per-Unit Cost Functions 256
choft-Run TOtal and Per-Unit Cost Curves 257
ohoft-Run TOtal and Per-Unit Cost Curves 257
- -.
7-3 Long-Run Cost Curves 260
Long-Run TOtal Cost Curves 260
Long-Run Average and Marginal Cost Curves 262
CASE STUDY 7-1 The Long-Run Averoge COst Curve in Electrl'city
Generatl'On 264
7-4 Plant Size and Economies of Scale 265
CASE STUDY 7-2 The shQpe olthe Long-Run Average CO5t Curve 267
- -..
7-5 LearningCurves 268
CASE STUOY 7-3 TO Reduce COstS, FI'rms O#en Look FQrAfield 270
7-6 Minimizing Costs Internationally--The New Economies
- ~. - -
of Scale 271
International Trade in inputs 271
CASE STUDY 7-4 The IBM PC and the soeing 777 Qnd 787Are All but
AmericQn! 272
The New international Economies of Scale 273
Immigration of Skilled Labor 274
.lation of Skilled Labor 274
7-7 Logistics orSupply-Chain Management 275
CASE STUDY 7-5 LogiStics Qt National semiconductors, SotUm, and
Corn pQq 276
Contents XiX
-. o
7-8 Cost--VOlume--ProntAnalysis and OOerating Leverage 276
ysis and Operating Leverage 276
Cost--Volume--Profit Analysis 277
J
Operating Leverage 279
CASE STUDY 7-6 Breokeven AnolySI's for Lockheed'5 Tri-stQr Qnd EUrope'S
Airbus industrl'e 281
-.
7-9 Empirical Estimation of Cost Functions 282
Data and Measurement Problems in Estimating Short-Run
Cost Functions 282
The Functional Form of Short-Run Cost Functions 283
CASE STUDY 7-7 EStl'matss of short-Run Qnd Long-Run CO5t
FunctionS 285
Estimating Long-Run Cost Functions with Cross-Sectional Regression
AnalVsis 286
y6ls 286
Estimating LonZ-Run Cost Functions with EnZineering and Survival
e Long-Run Cost Functions with Engineering and Survival
Techniques 287
1
Summary 289
Problems 290
Appendixic Chapter 7: Cost Analysis with Calculus 292
Appendix Problems 294
Supplementary Readings 294
Internet Site Addresses 295
INTEGRATING CASE STUDY 3: Productl'on and COst FUnctions in the
P6tFOIeum industFy 296
y 296
. CHAPTER & Market Structure: Perfect Competition,
Monopoly, and Monopotistic Competition 301
8-1 Market Structure and Degree of Competition 302
8-2 PerfectCOmpetition 303
Meaning and Importance of Perfect Competition 303
Price Determination under Perfect ComDetition 304
petition 304
CASE STUDY 8-1 Corn petl'tl'on in the New YOrk stock Market 305
short-Run Anal\'cis of a Perfectlll ComDetitive Firm 307
abort-Run AnalVsis of a Perfectly Competitive Firm 307
y als of a Perfectly Competitive Firm 307
short-Run SUDril\l Curve of the ComDetitive Firm and Market 310
short-Run Supply Curve of the Competitive Firm and Market 310
Long-Run Analysis of a Perfectly Competitive Firm 310
CASE STUDY 8-2 Long-Run Adjustffientin the U.5. COlon
Textile Industry 312
XX Contents
8-3 Competition in the Global Economy 312
Domestic Demand and Supply, Imports, and Prices 312
The Dollar Exchange Rate and the international Competitiveness
n x T S F',,'
of U.S. Firms 314
CASE STUDY 8-3 The Dehange Rots of the U.5. DollQr cud the Profitobility
Of U.s. FirmS 316
8-4 Monopoly 317
R f A4onoDOlll 317
sources of MonoDolV 317
poly 317
CASE STUDY 8-4 Borners tO ERtryQnd Monopoly byAIcoo 318
short-Run Price and OutDUt Determination under MonoDOI\r 319
short-Run Price and OutDut Determination under MonoDolv 319
put Determination under Monopoly 319
Long-Run Price and Output Determination under Monopoly 321
Comparison of Monopoly and Perfect Competition 322
CASE STUDY s-s The MQrket VOIue olMonopoly Profits in the New YOrk aty
TOXI'InduStry 323
8-5 MonopolisticCompetition 325
MeaninZ and ImDortance of MonoDolistic ComDetition 325
o and Importance of Monopolistic Competition 325
CASE STUDY 8-6 The Monopoll'Stl'cQlly COmpetitive RestQurant
MOrket 326
short-Run Price and Output Determination under MonODolistic
abort-Run Price and Output Determination under Monopolistic
Competition 327
Long-Run Price and Output Determination under Monopolistic
Competition 328
CASE STUDY 8-7 AdVertl'SerS Are TOking on COmpetitorS by NQme...
and Being sued 329
Product Variation and Selling Expenses under Monopolistic
Competition 330
Summary 331
y,31
Problems 332
Appendixic Chapter 8: Profit Maximization with Calculus 335
Appendixproblems 336
Supplementary Readings 337
Internet Site Addresses 338
. CHAPTER 9 Oligopotyand Firm Architecture 339
9-1 Oligopolyand Market Concentration 340
Oligopoly: Meaning and Sources 340
Concentration Ratios, the Herfindahl index, and Contestable
Markets 341
CASE STUDY 9-1 BrandS: Thrive orDie 342
CASE STUDY 9-2 Industrl'QI COncentFQtion I'n the UnitsdStQt6s 343
Contents fi
9-2 OligopolyModels 344
The Coumot Model 345
The Kinked Demand Curve Model 347
Cartel Arrangements 349
CASE STUDY 9-3 The OrgQnl'zotion of P6tFOleum twortl'ng COuntrl'es
(OPEC) cartel 350
Price Leadership 351
9-3 Profitability and Efficiency implications ofoligopoly 353
Porter's Strategic Framework 353
Efficiency ImDlications of Oligopoly 354
J plications ofoligopoly 354
CASE STUOY 9-4 FI'rm SI'Ze ondprofitobility 355
CASE STUDY 9-5 Measuring the PUre ENciencyofoperoting UnitS 356
9-4 The Sales Maximization Model 357
9-5 The March of Global Oligopolists 359
CASE STUDY 9-6 The GlobalizQtion OftheAutomobile industry 360
CASE STUDY 9-7 RiSI'ng COrn petitl'On in GIobol BQnking 361
CASE STUDY 9-8 The GloboliZotl'On Of the PhQrmaceutical industry 363
9-6 The Architecture of the ideal Firm and the Creative
Company 364
The Architecture of the ideal Firm 364
The Evolution of the Creative CompanV 366
pany 366
CASE STUDY 9-9 FI'rm ArchitectUre and Orgonl'zQtionQI
COmpetl'tl'veness 367
CASE STUDY 9-10 The TOP Innovatl've COrn ponies in the WOrld 368
9-7 TheVirtual Corporation and Relationship Enterprises 369
The Virtual Corporation 369
Relationship Enterprises 370
CASE STUDY 9-11 Relatl'onshl'P EnterpriSes in Aerospoce Airlines,
T6lecommunicotl'Ons, QndAutomobiles 371
SummarV 372
y 372
Problems 373
Appendixic Chapter 9: OligopolyTheory Mathematically 374
The Coumot Model 375
The Kinked Demand Curve Model 377
The Centralized Cartel Model 378
The Market-Sharing Cartel 379
The Sales Maximization Model 380
Appendix Problems 382
Supplementary Readings 382
Internet Site Addresses 383
..
III COntents
. CHAPTER 10 Game Theory and Strategic Behavior 385
10-1 Strategic Behavior and 6ame Theory 386
CASE STU DY 10-1 Militory strategy cud strotsgic Business
DeciSions 387
10-2 DominantStrategy and Nash Equilibrium 388
Dominant Strategy 388
Nash Equilibrium 389
CASE STUDY 10-2 Dell COrn putsrs and Nosh Equilibrium 390
10-3 The Prisoners' Dilemma 391
10-4 Price and Nonprice Competition, Cartel Cheating,
. -.. -..
and Prisoners' Dilemma 392
Price ComDetition and the Prisoners' Dilemma 392
petition and the Prisoners' Dilemma 392
NonDrice ComDetition. Cartel Cheating, and the Prisoners' Dilemma 393
puce Competition, Cartel Cheating, and the Prisoners' Dilemma 393
CASE STUOY 10-3 TheAiril'nes'FQre WQrQndthepriSoners'Dilemmo 394
10-5 Repeated Games and Tit-for-T8t Strategy 395
10-6 Strategic Moves 396
Threat, Commitments, and Credibility 396
Entry Deterrence 397
J Deterrence 397
CASE STUOY 10-4 Wal-MQft'S PF6emptl've twonsion porketing
strateoy 398
10-7 Strategic Behavior and international Competitiveness 399
.
CASE STUDY 10-5 COrn ponies' stfQtegic MiStokes and FOilures 401
10-8 Sequential Games and Decision Tabes 402
CASE STUOY 10-6 Airbus'S DeciSion tO suild the A380 cud soeing's Sonic
CruiSer Response Qnd the 747-8 404
SummarV 405
y 405
Problems 405
Supplementary Readings 408
Internet Site Addresses 408
. CHAPTER 11 Pricing Practices 410
11-1 Pricing of Multiple Products 411
Pricing of Products with interrelated Demands 411
Plant CaDacitV Utilization and ODtimal Product Pricing 413
pacity Utilization and Optimal Product Pricing 413
Optimal Pricing of Joint Products Produced in Fixed Proportions 414
Optimal Pricing and Output of Joint Products Produced in Variable
Proportions 416
CASE STUDY 11-1 Optl'mQI Pricl'ng cud Output by Gilleds 418
Contents Uiii
11-2 Price Discrimination 419
Meaning of and Conditions for Price Discrimination 419
First- and Second-Degree Price Discrimination 420
Third-Degree Price Discrimination Graphically 422
Third-Degree Price Discrimination Algebraically 423
CASE STUOY 11-2 Price DiScriminotion by COn Edl'Son 424
if-3 International Price Discrimination and Dumping 426
CASE STUOY 11-3 KOdQkAntl'dumping DiSputss with Ful'i 427
11-4 Trsnsfer Pricing 428
Meaning and Nature of Transfer Pricing 428
Transfer Pricing with No External Market for the intermediate
Product 429
Transfer Pricing with a Perfectly Competitive Market
for the intermediate Product 430
Transfer Pricing with an Imperfectly Competitive Market
for the intermediate Product 432
CASE STUOY 11-4 TrQnSfer Pricing by MultinotionQIS Operating in
emeroing Mar^ets 434
CASE STUOY 11-5 TrQnsfer Pn'cing in Advonced COuntries 435
if-5 Pricing in Practice 435
Cost-Plus Pricing 436
Evaluation of Cost-Plus Pricing 436
Incremental AnalVsis in Pricing 438
axis in Pricing 438
CASE STUDY 11-6 IncrementQI Pn'cing ot Con ti'nentOIAiril'nes 439
Peak-Load Pricing, Two-Part Tariff, Tying, and Bundling 440
Other Pricing Practices 441
CASE STUDY 11-7 Bundling in the Leosing Of MoVI'es 442
CASE STUDY 11-8 No-Hoggling VQIue Pn'cing in CorBuying 443
CASE STUDY 11-9 NQme YOur Pn'ce ot Pn'cell'ne 444
SummarV 445
y 445
Problems 446
Appendix to Chapter 11: Third-Degree Price Discrimination
.'.
With Calculus 448
Appendixproblems 451
Supplementary Readings 451
Internet Site Addresses 452
INTEGRATINg CASE STUDY 4: eBayQndCOmpetition on thelntsmet 453
INTEGRATING CASE STUDY 5: TheArtolDeviSingAirlares 455
.
HIV COntents
. CHAPTER 12 Regulation and Antitrust: The Role
of Government in the Economy 461
Y 461
12-1 6overnment Regulation to Support Business and to Protect
Consumers, WOrkers, and the Environment 462
Government Regulations that Restrict Competition 463
Government Regulations to Protect Consumers, Workers, and the
.ulations to Protect Consumers, Workers, and the
Environment 464
CASE STUDY 12-1 The FDA stePS UP Regulation Of the FOod and Drug
Industry 466
CASE STUDY 12-2 RequIQtl'On GreotlyReducedAirPOllution 467
MuIQtl'On Greotly ReducedAirPOllution 467
12-2 EXternalities and Regulation 468
The Meaning and Importance of Extemalities 468
Policies to Deal with Extemalities 470
CASE STUDY 12-3 The MQrketforDumping RightS 472
12-3 Public Utility Regulation 473
Public Utilities as Natural Monopolies 473
Difficulties in Public UtilitV Regulation 475
; .ulation 475
12-4 Antitrust: Government Regulation of Market Structure
and conduct 476
12-S Enforcement of Antitrust Laws and the Deregulation
Movement 476
Enforcement of Antitrust Laws. Some General Observations 476
Enforcement of Antitrust Laws: Structure 477
CASE STUDY 12-4 The IBM andAT&TCOses 478
Enforcement of Antitrust Laws: Conduct 479
CASE STUDY 12-5 AntitFUst and the NewMerger Boom 480
The Deregulation Movement 481
CASE STUDY 12-6 The MicrosO#AntitFU5tCQse 482
CASE STUDY 12-7 Deregulotion OftheAiriine industry.'
AnAssessment 484
12-6 Regulation of international Competition 485
CASE STUDY 12-8 VOluntory abort RestFQintS on japanese Automobiles
to me United States 486
12-7 The Effect of T&xation on Business Decisions 488
CASE STUDY 12-9 COrporats TOxRQter Qround the WOrld 488
CASE STUDY 12-10 U.5. Border TaXeS Qnd twoftsubsidies 489
COntents TV
Summary 490
y f90
Problems 491
Supplementary Readings 493
Internet Site Addresses 495
. CHAPTER 13 RiskAnaIysis 496
13-1 Riskand Uncertainty in Managerial Decision
Making 498
CASE STUDY 13-1 The RI'Sk Fooed by COca-COla in Changing
ItS secretFOrmuIQ 499
13-2 Measuring Riskwith Probability Distributions 499
CASE STUDY 13-2 The BiggestBusiness FQilures 500
ProbabilitV Distributions 500
y Distributions 500
An Absolute Measure of Risk: The Standard Deviation 503
Measuring Probabilities with the Normal Distribution 504
A Relative Measure of Risk: The Coefficient of Variation 506
CASE STUDY 13-3 RI'SkMetrics: A Method of Measuring VOIue
QtRI'Sk 507
13-3 UtilityTheory and RiskAversion 508
CASE STUDY 13-4 The PUrchQse ofinsuronce Qnd GQmbll'ng by the same
IndiVI'dual--A Seeming COntFQdiction 511
13-4 AdjustingtheV8luation Model for Risk 512
Risk-Adjusted Discount Rates 512
Certainty-Eauivalent Approach 514
j equivalent Approach 514
CASE STUDY 13-5 Adl'ustl'ng the VQluation Model IOr RI'sk in the
Real WOrld 516
13-5 OtherT6chniques for incorporating Risk into
Decision Making 517
Decision Trees 517
simulation 519
olmulation 519
13-6 Decision Making under Uncertainty 520
The Maximin Criterion 520
The Minimax Regret Criterion 521
Other Methods of Dealing with Uncertainty 522
CASE STUDY 13-6 SPreadl'ng RI'SkS in the Choice of Q POrtfOll'O 523
13-7 FOreign-EXChange Rise and Hedging 524
CASE STUDY 13-7 How FOrel'gn Stools Hove Benefit6d Q Domestic
POrtfOliO 525
CASE STUDY 13-8 InformQtl'on, RI'sk, and the COllapse of Long-T8rm CQpitQI
MQnaqement 527
Mement 527
.
UVI COntents
13-8 Information and Risk 528
Asymmetric information and the Market for Lemons 528
; Inmetric information and the Market for Lemons 528
The insurance Market and Adverse Selection 529
The Problem of Moral Hazard 529
The Principal--Agent Problem 530
CASE STUDY 13-9 Do Golden PQrochut6s Reward FQilure? 531
Auctions 532
CASE STUOY 13-10 Auctl'Oning OftheAimpves 533
SummarV 534
y 534
Problems 535
Supplementary Readings 539
Internet Site Addresses 540
. CHAPTER 14 Long-Run investment Decisions:
Capital Budgeting 541
14-1 Capital Budg6ting: An Overview 542
Meaning and Importance of Capital Budgeting 542
Overview of the Capital Budgeting Process 544
CASE STUDY 14-1 COst--BenefitAnolySiS cud the 55T 546
14-2 The Capital Budgeting Process 546
Projecting Cash Flows 546
J 5
CASE STUOY 14-2 The EurotUnnel: Another Bod Frsnch--BritiSh
Investorment? 547
Net Present Value (NPV) 549
Internal Rate of Return (IRR) 550
Compedson of NPV and IRR 550
14-3 Capital Rationing and the Prontability Index 551
CASE STUDY 14-3 Pennzoil'S $3 Billion CQpitQI Budgeting
Chollenge 552
CASESTUDY 14-4 CopitOI Budgetingforlnvestffients in Human
COpitQI 553
14-4 The Cost of Capital 554
The Cost of Debt 555
The Cost of Equity Capital: The Risk-Free Rate Plus Premium 555
The Cost of Equity Capital: The Dividend Valuation Model 556
The Cost of Equity Capital: The Capital Asset Pricing Model (CAPM) 557
.
The Weighted Cost of Capital 558
14-5 Reviewing investment Projects after Implementation 559
CASE STUOY 14-5 The Choice beaten Equity cud Debt 560
CASE STUDY 14-6 COpitOI Budgeting T6chniques of Mojor U.S. Firms 561
Contents UVii
14-6 The Cost of Capital and international COmpetitiveness 562
Summary 563
v 563
Problems 564
Supplementary Readings 567
Internet Site Addresses 568
INTE6RATING CASE STUDY 6: DereguIQtl'On, RI'Sk, CQpitQI Budgetl'ng,
Qnd the TSlecom Crl'SI'5 569
. APPENDIX A Compounding, Discounting, and
PresentVaIue 575
A-l Future Value and Compounding 575
pounding 575
A-2 Present Value and Discounting 577
A-3 Future Value of an Annuity 577
, J77
A-4 Present Value of an AnnuitV 578
y 378
A-5 Compounding and Discounting Periods 579
A-6 Determining the interest Rate 579
A-7 Perpetuities 580
. APPENDIX B Interest FactorT8bIes 581
TABLE B-l Compound Value of $1 582
TABLE B-2 Present Value of $1 583
TABLE B-3 Future Value of an Annuity of $1 for n Periods 584
J
TABLE B-4 Present Value of an AnnuitV of $1 for n Periods 585
y of $1 for n Periods 585
. APPENDIX C StatisticaIT8bIes 586
TABLE C-l Areas under the Standard Normal Distribution 587
TABLE C-2 Areas in the Tails of the t Distribution 588
TABLE C-3 F Distribution for 5 Percent Significance 589
TABLE C-3 F Distribution for I Percent Significance 590
TABLE C-4 Durbin--Watson Statistic for 5 Percent Significance
Points of dL and du 591
TABLE C-4 Durbin--Watson Statistic for I Percent Significance
Points of dL and du 592
GlossarV 593
y J93
Index 606
