MGMT S-8010

Microeconomics of Business

Summer 2024

Course Information

CRN: 35830
Section Number: 1
Format: Live Attendance Web Conference
Credit Status: Graduate
Credit Hours: 4

Course Description: This course presents the basic analytical tools of microeconomics.
We start by looking at the basic operation of a market where price and quantity of a
product are determined. Then we focus on the decision making of individual consumers
and ask how these decisions can be optimized or improved. Next, we look at the ways
firms make and coordinate their decisions under varying market structures, including
perfect competition and monopoly. Then we look at strategic behavior in imperfectly
competitive markets, such as monopolistic competition and oligopoly, making use of
concepts from game theory. Finally, we take up topics including information economics,
environmental externalities, and public goods. Students may not take both ECON S-1010
and MGMT S-8010 for degree or certificate credit.

Prerequisites: A basic knowledge of algebra. A satisfactory score on the test of critical

reading and writing skills or a B or higher grade in the alternate expository writing course.

Instructor Information & Office Hours

Shahruz Mohtadi
Email: shahruz_mohtadi@fas.harvard.edu

Course Goals / Learning Outcomes

1. To introduce students to fundamental microeconomic concepts and theories

relevant to business environments.
2. To develop students' analytical skills in analyzing market demand, supply, and
pricing strategies.
3. To familiarize students with consumer behavior and its implications for marketing
and pricing decisions.
4. To explore production and cost analysis and its role in determining optimal
production levels and pricing.
5. To enable students to analyze different market structures and their impact on
business strategy and competition.
6. To enhance students' ability to make strategic business decisions through the
application of microeconomic principles.

Mode of Attendance & Participation Policy

Class meetings take place over Zoom. Because they involve active participation,
discussion, and dialogue, you are expected to attend all class meetings. Please arrive on
time. You should attend Zoom meetings with a functional web-camera and microphone,
prepared with materials needed, to engage thoughtfully, and with your camera on. You
may turn off your camera for occasional interruptions or momentarily for privacy.

You will also need the most up-to-date Zoom client installed on your computer to join
class. Please participate from a safe and appropriate environment with appropriate
clothing for class. Participating while traveling or in a car is not permitted. In addition,
please do not join class via mobile phone or web browser.

Please be sure to review important information on Student Responsibilities and

Policies.

Assignments & Grading

Exams

There will two exams, a midterm and a final exam. The midterm will cover materials from
sessions 1 through 5. The final exam will cover materials from sessions 6 through 12.
The exams are 90 minutes and will consist of short and long-answer essay questions.

Assignments

There will be four assignments. The assignments consist of case studies to assess your
managerial decision-making skills.

All assignments must be typed, Times Roman font 12, and uploaded on canvas.
Required excel spreadsheets must be uploaded separately.

Grading

40% Assignments

30% Midterm Exam - July 16

30% Final Exam - August 8

Your exams and assignments will be graded on a scale of 0-100 and your total score for
the semester will be aggregated and adjusted based on the weightings above so that it is
within the same range (0 – 100). Your initial (raw) grade will be based on this score as
follows:

Letter Grade Adjusted Total

Score
A 95 - 100
A- 90 - 94
B+ 87 - 89
B 83 - 86
B- 80 - 82
C+ 77 - 79
C 73 - 76
C- 70 - 72
D below 69
Grade Definitions

Students registered for undergraduate or graduate credit who complete the requirements
of a course may earn one of the following grades:

A and A– Earned by work whose superior quality indicates a full mastery of the subject
—and in the case of A, work of extraordinary distinction. There is no grade of A+.

B+, B, and B– Earned by work that indicates a strong comprehension of the course
material, a good command of the skills needed to work with the course materials, and the
student’s full engagement with the course requirements and activities.

C+, C, and C– Earned by work that indicates an adequate and satisfactory

comprehension of the course material and the skills needed to work with the course
materials, and that indicates that the student has met the basic requirements for
completing assigned work and participating in class activities.

D+, D, and D– Earned by work that is unsatisfactory but that indicates some minimal
command of the course materials and some minimal participation in class activities that
is worthy of course credit.

E Earned by work that is unsatisfactory and unworthy of course credit. This grade may
also be assigned to students who do not submit required work in courses from which
they have not officially withdrawn by the withdrawal deadline. Zero or E grades are
assigned to students for missing work. These grades are included in the calculation of
the final grade.

Course Materials

Managerial Economics and Business Strategy

ISBN: 13: 9781260940541
Authors: Michael R. Baye and Jeffrey T. Prince
Publisher: McGrawHill
Publication Date: 2022
Edition: 10
You may purchase or rent the book at:
https://www.mheducation.com/highered/product/managerial-economics-business-
strategy-baye-prince/M9781260940541.html

Academic Integrity Policy

You are responsible for understanding Harvard Summer School policies on Academic
Integrity and how to use sources responsibly. Violations of academic integrity are taken
very seriously. Visit Resources to Support Academic Integrity and the Harvard Guide to
Using Sources to review important information on academic citation rules.

AI Technologies. The Summer School's Academic Integrity Policy. prohibits students

from representing work as their own that they did not write, code, or create. It is never
permissible to submit work generated by machine learning and AI technologies (such as
ChatGPT) without proper attribution. In this course, the use of AI technologies,
including ChatGPT, is strictly prohibited.

Accessibility Services Policy

The Division of Continuing Education (DCE) is committed to providing an accessible

academic community. The Accessibility Services Office (ASO) is responsible for
providing accommodations to students with disabilities. Students must request
accommodations or adjustments through the ASO. Instructors cannot grant
accommodation requests without prior ASO approval. It is imperative to be in touch with
the ASO as soon as possible to avoid delays in the provision of accommodation.

DCE takes student privacy seriously. Any medical documentation should be provided
directly to the ASO if a substantial accommodation is required. If you miss class due to a
short-term illness, notify your instructor and/or TA but do not include a doctor's note.
Course staff will not request, accept, or review doctor's notes or other medical
documentation. For more information, email accessibility@extension.harvard.edu.

Publishing or Distributing Course Materials Policy

Students may not post, publish, sell, or otherwise publicly distribute course materials
without the written permission of the course instructor. Such materials include, but are
not limited to, the following: lecture notes, lecture slides, video, or audio recordings,
assignments, problem sets, examinations, other students’ work, and answer keys.
Students who sell, post, publish, or distribute course materials without written permission,
whether for the purposes of soliciting answers or otherwise, may be subject to
disciplinary action, up to and including requirement to withdraw. Further, students may
not make video or audio recordings of class sessions for their own use without written
permission of the instructor.

Class Meeting Schedule

This is a tentative course schedule. The schedule may change due to unforeseen
circumstances. If there are any changes, you will be notified through
announcements on canvas.

Week 1

June 25 (Tues.): Class 1

Introduction to Managerial Economics, How goals, constraints, incentives, and market

affect economic decisions. Explain the role of profit in a market economy.

Baye and Prince, Chapter 1

June 27 (Thurs.): Class 2

Explain the functions of a market; the laws of supply and demand, and the determination
of price in a competitive environment. Explain factors that change demand and supply
and their effects on price and quantity.

Baye and Prince, Chapter 2

Week 2
July 2 (Tues.): Class 3 The concept of elasticity as a tool to forecast changes in
revenues, prices, and/or sales.

Baye and Prince, Chapter 3

July 4 (Thurs.): NO CLASS - Independence Day holiday

Week 3

July 9 (Tues.): Class 4 The theory of consumer behavior; how changes in prices and
income affect consumer spending behavior and

Baye and Prince, Chapter 4

July 11 (Thurs.): Class 5 The Production Process and Costs; how a business makes
decisions about converting inputs into output. The definition and measurement of cots of
production in the short-run and the long-run.

Baye and Prince, Chapter 5

Week 4

July 16 (Tues.): Class 6 MIDTERM EXAM

The midterm exam will cover weeks 1 through 3. The exam is available on Canvas. It will
consist of essay questions. You have 90 minutes to complete the exam.

The nature of the industry; Define the characteristics of different market structures:
Perfect Competition, Monopoly, Monopolistic Competition, and Oligopoly.

Baye and Prince, Chapter 7

July 18 (Thurs.): Class 7 Perfect Competition; How managers make decisions in a

perfectly competitive, monopolistic, and monopolistically competitive markets.
Week 5

July 23 (Tues.): Class 8Baye and Prince, Chapter 8 Oligopolies and Strategic Decision
Making

Lecture Notes

July 25 (Thurs.): Class 9 Game Theory; The use of game theory tools to explain decision
making in the presence of firm interdependence.

Baye and Prince, Chapter 10

Week 6

July 30 (Tues.): Class 10 Pricing Strategies for Firms with Market Power; Price
Discrimination, Two-Part Pricing, Bundling.

Baye and Prince, Chapter 11

August 1 (Thurs.): Class 11 Decision Making When Markets Fail. Asymmetric

Information, Adverse Selection and Moral Hazard.

Lecture Notes

Externalities and Public Goods

Lecture Notes

Week 7
August 6 (Tues.): The Role of the Government in the Market; How to manage in the face
of government regulations.

Lecture Notes

August 8 (Thurs.): FINAL EXAM

Final Exam

The Final exam covers weeks 4 through 7. It will be available on Canvas. You have 90
minutes to complete the exam.