AEM 4100

Microeconomics for Management and Consulting

Course Description

Course information provided by the 2024-2025 Catalog. Courses of Study 2024-2025 is scheduled to publish mid-June.

Many managerial decisions, as well as recommendations provided by consulting firms, are based on economic analyses. The goal of this course is to go beyond basic microeconomics and cover more advanced microeconomic frameworks and analyses most useful for management and consulting. The course is divided into four parts. Part I starts by reviewing the basic analyses of supply and demand, profit maximization concerning production and pricing, and competitive equilibrium. It then covers a number of advanced issues concerning the costs of production. Part II focuses on advanced issues concerning pricing including price discrimination, two-part pricing, and pricing a product line. Part III focuses on other firm-consumer strategies including issues that arise when selling a durable good, as well as basic concepts concerning asymmetric information.  Part IV focuses on firm-firm strategies including contracting/agency analysis and oligopoly interaction.

Prerequisites/Corequisites Prerequisite: AEM 2600 or ECON 3030 or equivalent.

Last 4 Terms Offered 2025SP, 2023FA, 2022FA, 2021FA

Outcomes

• Employ microeconomic basics such as maximization analysis and the marginal cost equals marginal revenue rule, perfect competition and long run equilibrium, and the basics of input choice in managerial decision making.
• Apply the marginal cost equals marginal revenue rule to various real-world situations concerning costs such as multiple factories, capacity issues, and peak-load pricing/joint supply.
• . Formulate optimal pricing strategies for capturing consumer surplus across various real-world settings employing the logic of price discrimination and/or two-part pricing. This includes how to price a product line.
• Design internal firm operations concerning contracting issues/ agency analysis, transfer pricing, and the make/buy/sell decision.
• Formulate firm strategies in oligopoly/rivalry settings. This includes understanding the role of antitrust.

When Offered Spring.

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