Episode 2: Economics is Demanding

MBA Hole Podcast

Episode 2 - Economics is Demanding Warning! The MBA Hole podcast is not intended for children. The explicit tag is there for a reason. It is only intended for adults that are masochistic enough to consider taking on an MBA program. If you like the show, please give us a five star rating and review on apple podcasts. This helps us fool our robot business overlords that we are, in fact, more important than we actually are. Follow us on the Twitter box @mbaholepodcast. My first MBA Course Get ready for HBR case studies Get ready for group projects!! Market Structure Monopoly Competitive Market Market Power Econo mies of Scale Supply and Demand Supply and demand curves only shift right or left Quantity demanded rises as price falls Substitution effect: price changes relative to another similar good Income effect: change in price effectively changes disposable income Demand can shift for many reasons, substitutes, income, demographics, consumer tastes, etc. Qd=a-b(P) Quantity supplied increases with price Qs=c+d(P) Supply can shift when productivity increase, costs decrease, etc. Equilibrium - NO PRESSURE TO CHANGE PRICE Surplus vs. Shortage Break Even - Marginal Cost=ATC - where marginal cost equals change in total cost/change in quantity & ATC = TC/Q Elasticity Sensitivity of demand due to price changes Ep=(%changeQ)/(%changeP) Elastic if E>1elastic, less than 1, means inelastic. Basically, if something is elastic, it means customers are price sensitive. You will make more money with a decrease in price. In this case, there are a lot of substitutes. An inelastic product has customers that are not price sensitive. If you cut the price, you’re leaving money on the table. Other elasticities; income, arc, cross/price, etc. Price elasticity of supply basically a percentage change in quantity that comes from a 1% change in price. Disclaimer: The opinions and views expressed in this show are that of the host only. They do not represent their children, wives, dogs, employers, co-workers, neighbors, inlaws, friends, acquaintances, or esteemed university faculty.