Welcome to Managerial Economics: Applications for the Modern Firm! This six-topic, concise survey of microeconomics focuses on the application of microeconomic theory to managerial practice. I wrote this book for individuals who are responsible for making important management decisions for their firm. The applicability of this book does not depend on whether you are a young, future business professional or a seasoned working professional, nor whether you make decisions on behalf of for-profit or nonprofit organizations. Fortunately, it also doesn’t depend on whether you’ve studied economics before today. My hope is that both first-time learners and long-time students of economics will experience growth in their foundational understanding of microeconomic theory as a result of studying this book.

The fact that Managerial Economics: Applications for the Modern Firm is written for real managers who may need to make real decisions on Monday morning is what makes this book unique. First, I narrow the expansive and impressive discipline of microeconomics down to six topics. We start by getting into the habit of thinking like an economist, developing “econ speak” and identifying key, foundational concepts that underlie most microeconomic theory. We then add new concepts and models that build the supply and demand model, which is considered a roadmap for managers who make pricing decisions. We then thoughtfully consider pricing and other decisions in the context of market structure, and wrap up by studying strategic behavior of firms from the economic perspective.

Economics may not be an easy or engaging subject for everyone, but it’s certainly one that matters in the real world. To help us get to the point where we all realize its relevance, I've created numerous opportunities for you to engage with real-world applications of microeconomic theory in this book. Whether it be thorough poll questions, critical thinking scenarios, or real-world application articles, I encourage you to relate the economics in this book to what you already know. These engagement opportunities were intentionally created to make microeconomics “stick” for the managerial decision maker.

By the end of this book, you will be able to interpret traditional microeconomic models within the framework of practical management issues, analyze the impact of market dynamics on the modern economy, and utilize the analytical tools of microeconomics to make rational business decisions. Most importantly, you will be able to relate traditional economic analysis to both everyday and on-the-job phenomena in the real world.