This is merely a note of appreciation to this section of ECON 637. I hope that you have enjoyed the Prince and Baye's text as much as I have.

Managerial Economics is meant to be a graduate level economics survey course; it's an applied business microeconomics course. Microeconomics is a notoriously math laden and I refrained and bristled to go too deep. Again, this course was meant to be like a church catechism, introductory philosophy, or even driver's ed; it's easy and intuitive but we benefit from reinforcement. We naturally know the concepts but we do well to recognize them and double down on their use.

The book was okay. Just know that it did not go deep into supply, macroeconomic factors, labor economics, or econometrics, which consume an economist's duties. However, I did like the treatment of strategy and game theory, the very understandable level of calculus, and the treatment of elasticities of demand (this is a hard concept to get so bravo if you feel good with them).

Finally, this textbook is ubiquitous in use in MBA programs. I know for a fact that this book is in use at Georgetown's MBA and our course covered their syllabus point for point.

Takeaways

The major takeaways from this course are conceptual. Don't worry about all that math. It's the concepts that matter most.

Profit

Profit is a function of cost and revenue. Revenue is from quantity sold minus the costs of production. We maximize profit where the incremental costs match the incremental revenues (MR=MC). This simply implies balance and equilibrium so we are not missing customers, flooding the market, or overrunning costs.

Elasticity

Elasticities of demand are at the heart of this book. Essentially, this means that if you, as a consumer, have inelastic demand for a good (say grapes), then you will pay more because there are few substitutes (like nasty cherries). You pay higher prices before you substitute. This is shown in pharmaceuticals and vaccines. Contrasting this is being elastic to price changes of a good. Go to the store and see if you really care what type of pepper or sugar or the salt you buy. Chances are that you look for the cheapest store brand because it's pepper; it's a commodity (who cares).

Price Takers vs. Price Makers

The book went over oligopolies and monopolies (but left out monopsonies). There are more of these situations than you may think in life. If you, as a producer, have a product that is "differentiated," or non-homogenous, then your demand curve is downward sloping and you have an incentive to squeeze all the consumer surplus out of your customers for your own surplus. Think about toothpaste, salad dressing, or chocolate. There's a price point or unique product for any consumer.

Game Theory

This is my favorite area and why I fell in love with economics. Thinking strategically is equal, but not necessarily synonymous, with economic thinking. I think that this skill can honestly be honed from playing chess or Texas-hold'em regularly. But don't ignore the skills of evaluating the game you are in be it repeated, one-shot, and whether you have triggers that queue punishments.

Conclusion

In conclusion, I thank you for all of your hard effort and being affable. I love economics and I hope that I didn't ruin the subject for you. I tried to keep the content interesting and not getting too bogged down with the mathematics.

eflect on what you are taking from this.