2. Disclaimer
This is not intended to be a condensed outline of the course,
but simply what I took as key takeaways. In some courses
there are many areas discussed that aren’t contained in these
slides, as they are items I was already familiar with and didn’t
feel the need to document or felt they wouldn’t be useful to me
in my current career. I think of these as my “cheat sheet” of
material that can help me in my current & future roles and are
DRAFT…like Google’s Beta are subject to change – Matt
Crane
Gupta, Barnali & Thomasson, Melissa. (2009). Course
presented on Microeconomic Analysis/Managerial Decision
Making. Miami University, Oxford & Cincinnati, OH.
3. Firm Boundaries
• Economies of Scope: produce more than 1 type of
good/service causes costs ↓
• Economies of Scale: producing more of a good/service
causes costs ↓
• Learning Curve Strategy: expand production quickly to
gain learning/cost advantage later (initially won’t be
apparent)
• Boundaries:
– Horizontal: Economies of Scope
– Vertical: move up/down supply chain (Porter’s Value Chain)
4. Markets
• Degree of concentration:
– Monopoly: 1 seller/highly concentrated
– Perfect competition: many sellers
– Herfindahl index(HHI): sum(market shares2)
– Oligopoly: few large sellers
