Managerial Economics 

Reflection and Discussion

Chapter 5: Investment Decisions:  Look Ahead and Reason Back   

Chapter 6: Simple Pricing      

Chapter 7: Economies of Scale 

Reflect on the assigned readings for the week. Identify what you thought was the most important concept(s), method(s), term(s), and/or any other thing that you felt was worthy of your understanding.

Also, provide a graduate-level response to each of the following questions:

Describe an investment decision you or your company has made. Compute the opportunity costs and benefits of the decision. Did your company make the right decision? If not, what would you do differently? Compute the NPV of the investment.

Assignment

Problem Set #2

1. Describe two activities inside your organization, or one inside and one outside your organization, that exhibit economies (or diseconomies) of scope. Describe the source of the scope economies. How could your organization exploit the scope economy or diseconomy? Compute the profit consequences of the advice.

2. Describe a pricing decision your company has made. Was it optimal? If not, why not? How would you adjust price? Compute the profit consequences of the change.

The assignment is to answer the question provided above in essay form. This is to be in narrative form. Bullet points should not to be used. The paper should be at least 1.5 – 2 pages in length, Times New Roman 12-pt font, double-spaced, 1 inch margins and utilizing at least one outside scholarly or professional source related to organizational behavior. This does not mean blogs or websites. This source should be a published article in a scholarly journal. This source should provide substance and not just be mentioned briefly to fulfill this criteria. The textbook should also be utilized. Do not use quotes. Do not insert excess line spacing. APA formatting and citation should be used.