1. MBA 201A Midterm Review

2. Overview  Exam Review (My guess at topics / questions)  Midterm Practice Problems  Anything else?

3. Mid Term Topics (My guess…)  Big Picture: 20% of your grade and only counts if you did better than the final  Topics?  Monopoly pricing (we just covered this so it’s fresh)  Decision trees (probably simpler than AK Steel)  Economic costs / Opportunity costs (use PS questions as a model)  Conceptual questions  Practice sample midterm questions and problem sets  Look over lecture notes

4. Monopoly Pricing  MR = MC !!!!  Revenue = Q(P) * P  Profits = Q(P)* P – TC  Take derivative of Revenue to find MR  Take derivative of TC to find MC (fixed costs should go away)  Use the equations to find Qs and Ps  But then ask yourself if makes sense to stay in business

5. Decision Trees  Read the WHOLE question first before trying to map out tree  Chance or decision node?  Do the probabilities add up to 100% in your chance node?  Calculate EVs making sure you take into account costs/income at each branch  If you are having trouble visualizing the tree, put yourself in decision maker’s shoes (CEO, etc.)…what does the universe of options look like?  Check your math

6. Economic Costs  The danger of allocating overhead  Can you change a decision where money is being spent? If not, then the cost is probably sunk  Don’t forget opportunity costs here (re-read examples in Hermalin’s Lecture Notes)  Follow the examples in the midterms and problem sets  Re-check your math

7. Questions on anything else?  Good Luck!  See you Friday @ 10am