Economics of StrategyDiscover the art of strategic thinking Revised and updated to reflect the cutting edge of academic thinking about business strategy, the Fourth Edition of Besanko, Dranove, Shanley, and Schaefer’s highly acclaimed text offers a solid economic foundation for strategic analysis. By presenting basic concepts of economic theory with ideas in modern strategy literature, the book provides an economic lens for viewing the broad sweep of the strategic activities of the firm. The book begins by focusing on the boundaries of the firm and examines competitive strategy from the perspective of industrial organization (IO) economics, particularly Porter’s Five Forces. It then explores strategic positioning and dynamics as well as topics associated with internal organization, including personnel economics, organization structure, and strategic fit. Features of the Fourth Edition
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... cost often depends on the total volume of output . Figure P.4 shows the marginal cost function associated with a particular total cost function . At low levels of output , such as Q " , increasing ... COST AND AVERAGE COST When Costs 15.
David Besanko. FIGURE P.5 RELATIONSHIP BETWEEN MARGINAL COST AND AVERAGE COST When average cost is decreasing ( e.g. , at output Q ' ) , AC MC ( i.e. , the average cost curve lies above the marginal cost curve ) . When average cost is ...
... average cost ( i.e. , cost per unit of output ) declines over that range . If average cost ( AC ) declines as output increases , then the marginal cost of the last unit produced ( MC ) must be less than the average cost . ' If average ...
Contents
STRATEGY AND ECONOMICS | 1 |
ECONOMIC CONCEPTS FOR STRATEGY | 9 |
Economic Costs and Profitability | 19 |
Copyright | |
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