PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Managerial Economics in a Global Economy Chapter 2 Optimization.

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PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Managerial Economics in a Global Economy Chapter 2 Optimization Techniques and New Management Tools

PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Expressing Economic Relationships Equations: TR = 100Q - 10Q 2 Tables: Graphs:

PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Total, Average, and Marginal Cost AC = TC/Q MC =  TC/  Q

PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Total, Average, and Marginal Cost

PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Profit Maximization

PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Profit Maximization

PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Concept of the Derivative The derivative of Y with respect to X is equal to the limit of the ratio  Y/  X as  X approaches zero.

PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Rules of Differentiation Constant Function Rule: The derivative of a constant, Y = f(X) = a, is zero for all values of a (the constant).

PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Rules of Differentiation Power Function Rule: The derivative of a power function, where a and b are constants, is defined as follows.

PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Rules of Differentiation Sum-and-Differences Rule: The derivative of the sum or difference of two functions U and V, is defined as follows.

PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Rules of Differentiation Product Rule: The derivative of the product of two functions U and V, is defined as follows.

PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Rules of Differentiation Quotient Rule: The derivative of the ratio of two functions U and V, is defined as follows.

PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Rules of Differentiation Chain Rule: The derivative of a function that is a function of X is defined as follows.

PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Optimization With Calculus Find X such that dY/dX = 0 Second derivative rules: If d 2 Y/dX 2 > 0, then X is a minimum. If d 2 Y/dX 2 < 0, then X is a maximum.

PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. New Management Tools Benchmarking Total Quality Management Reengineering The Learning Organization

PowerPoint Slides by Robert F. BrookerCopyright (c) 2001 by Harcourt, Inc. All rights reserved. Other Management Tools Broadbanding Direct Business Model Networking Pricing Power Small-World Model Virtual Integration Virtual Management