UNIVERSITY OF GUYANA

DEPT OF ECONOMICS
ECN 213: MANAGERIAL ECONOMICS
October 17, 2010
Tutorial Practice And Review

Costs, Market Structure and Pricing

The following Key Concepts should be reviewed and will be especially relevant for the mid-
semester Exam:

THEORY OF COSTS
Calculating all costs: fixed costs, short run marginal costs (SMC), ATC, AVC etc
1. Shape of cost curves
2. Sunk Costs
3. Marginal Costs and Incremental Costs

MARKET STRUCTURE
1. Equilibrium of monopolist in short and long run
2. Equilibrium of perfect competition in short and long run
3. The concept of pure competition
4. Imperfect competition

PRODUCT PRICING
Cartel pricing:
Conditions for and method

Oligopoly pricing
1. Dominant firm price leadership
2. Barometric price leadership
3. Pricing characteristics: stability etc
4. The kinked demand curve and conscious parallelism

Other pricing methods

1. Limit pricing
2. Mark-up pricing
3. New product pricing: skimming and penetration pricing