Traditional microeconomic theory has much to offer a manager. It suggests ways to increase profits by setting prices and packaging services, using advertising to increase demand and shows how internet auction sites like eBay affect competition and profitability. By using game theory to present and solve a manager’s decision-making problems and by focusing on the strategic nature of these problems, this text makes microeconomic theory much more intuitive and relevant for the business student.

The text is separated into four sections:

  • basic microeconomic theory of the firm and the basic tools of game theory
  • problems related to the strategic interaction between firms, including price and quantity competition and product differentiation
  • issues arising from strategic interactions within the firm, including vertical and horizontal integration, training and motivating workers, and labour unions
  • marketing economics including information problems, advertising, durable goods and the product life cycle.

This book will be suitable for any student with a background of introductory economics. The authors include a variety of international examples and case studies from the business world to expand and illustrate key concepts, and provide end-of-chapter exercises to test students’ grasp of the material. An online supplement comprising of problems and solutions as well as PowerPoint slides is available for lecturers.

chapter 1|10 pages


part |2 pages

Part I Theory

chapter 2|9 pages

The manager and the firm

chapter 3|22 pages

Monopoly and perfect competition

chapter 4|21 pages

Price discrimination

chapter 5|20 pages

Game theory

part |2 pages

Strategic interaction between firms

chapter 6|25 pages

Strategy in a market with two firms

chapter 7|27 pages

Product differentiation

chapter 8|26 pages

Entry deterrence and accommodation

chapter 9|24 pages

Government regulation of industries

part |2 pages

Strategic interaction within firms

chapter 10|20 pages

Vertical and horizontal integration

chapter 11|17 pages

Labour markets

chapter 12|21 pages

Training and motivating workers

chapter 13|20 pages

Trade unions

part |2 pages

Part IV Marketing economics

chapter 14|15 pages

The role of information

chapter 15|25 pages


chapter 16|12 pages


chapter 17|12 pages

Durable goods

chapter 18|10 pages


chapter 19|22 pages

The product life cycle