Managerial economics

In the years since the first edition of Managerial Economics was published, successful management has become even more complex and challenging. This complexity is a natural by-product of the dramatic, often radical, changes that have been occurring in our economic environment. Widespread volatility in the prices and availability of such basic goods and services as food, energy, and credit greatly affect people. firms, and government. Uncertainty about resource prices and availability, rapid changes in technology, and increases in international competition have produced major transformations in the context and process of managerial decision mak ing. In such an environment, sound economic analysis takes on even greater importance-whether the decision-making unit is an individual, household, firm, nonprofit organization, or government agency.

Managerial Economics, Fifth Edition, is designed to provide a solid foundation of economic understanding for use in managerial decision making. This text offers a rigorous treatment of economic theory and analysis, focusing on the use of managerial economics tools and techniques in specific decision-making settings. Examples and problems illustrate the application of theory to a wide variety of practical situations. The nature of the decision process and the role that economic analysis plays in that process are emphasized throughout.

Although both micro- and macroeconomic relationships have implications for managerial decision making, this revision of Managerial Economics continues to concentrate primarily on a set of microeconomic topics that are particularly impor tant. The book begins by developing an economic model of the firm.