LFU:online

This course offers a systematic treatment of the economics of the modern firm that aims at optimizing its decisions given its objective of profit maximization. The course draws on the insights of a variety of areas in modern economics and other disciplines, but presents a coherent and consistent treatment of the central problems in economic activity. Microeconomic analysis is applied to model firms’ and consumers’ decision making in order to understand optimal demand and production decisions. Basic mathematical tools such as optimization under constraints are reviewed and applied to determine managerial decisions such as determining optimal output and factor demand, given a firm’s technology. Furthermore, we give an overview of the different market structures and look at decision making in the presence of market power. Basic game theoretic tools are used to analyze strategic decision making in oligopoly. The course then considers decision making under uncertainty. Finally, it also presents the tools to analyze situations of asymmetric information, where principal-agent models and models of adverse selection are of particular interest for managerial decisions.

Final Exam