9781118041581

Industry concentration, oligopoly

and, 353–358

Inelastic demand, 85

Infant formula industry, 349–350,

381–382

Inferior goods, 82

Information, asymmetric. See

Asymmetric information

Information amount, competitive

situations and, 402

Information goods and services

customized pricing and

products, 107

demand analysis and, 103–107

Groupon, 105–106

network externalities and, 104–105

Information technology

firm boundaries and, 608

internal information sharing and,

608–609

organizational structure and,

608–609

Information value

additional alternatives value,

563–566

Bayes’ theorem and, 548–550

best price search, 563–566

business behavior and decision

pitfalls, 554–557

Challengerdisaster and, 557–559

expected value of information,

543–544

imperfect information, 544–547

oil-drilling decisions and, 542–544

optimal search and, 559–563

predicting credit risks and, 552–554

revising probabilities and, 547–551

simultaneous search and, 563–566

stock market and, 431, 566–568

valueless information, 550

Informational advertising, oligopoly

and, 380

Informativeness principle, 606

Innovation

disruptive, 255

flexibility and, 254–255

incremental, 255

Input

marginal cost of, 196

optimal use of, 196–198

Insurance demand, 520–521

Intel, 323, 324–325, 361

International business

different cultures and, 510

economic conditions and, 510

exchange-rate risks and, 510–511

perils of, 509–511

political risks and, 510

uncertain costs and, 510

International trade, 306–309

comparative advantage and, 244–247

restricted trade in watches, 306–309

tariffs and quotas and, 306–309

Internet

barriers to entry and, 305

consumer information and,

303–304

geographic range and variety

and, 304

lower costs and, 304–305

market competition and, 303–305

perfect competition and, 305

Inverse demand equation, 34

Investment problem, linear

programming and, 707–708,

737–739

iPad, 375

iPhone, 413–414

iPod, 414

Isocost line, 205

Isoquant, 202–205

iTunes, 414

J

Jackson, Thomas, 455

Jensen, Michael, 614

Jobs, Steve, 413

K

Kahn, Alfred, 334

Kahneman, Daniel, 518

Kerrigan, Nancy, 372–373

Kindle, 51–52, 375

Kinked demand curves, 366–368

Kinney Shoe, 451

Kyoto Treaty, 463–464

L

Labor specialization, 194

Lagrange multipliers, 70–71

Law of diminishing marginal returns,

194–196

Law of diminishing returns, 241

Law of one price, 290

Leading indicators, 162

Learning curve, price cutting and, 374

Least-cost production, 200–207

Legal barriers, monopolies and, 324

Lehman Brothers, 592, 616

“Lemons” market, 583–585

Leno, Jay, 5, 643, 645

Lenovo, 414

Letterman, David, 5–6, 9, 642–645

Limit pricing, 420–421

Linear production function, 207

Linear programming

algebraic solutions and, 717

allocating HIV resources and,

725–726

changes in objective function and,

719–721

clean coal and, 733–734

computer solutions and, 730–733

finding an optimal computer mix

and, 709–711

formulation and computer

solutions and, 726–737

formulation issues and, 718

graphing and, 711–714

investment problem and, 707–708,

737–739

larger problems and, 726–737

minimization problem and,

715–718

production at minimum cost

and, 729

production for maximum output

and, 726–729

regulation at least cost and,

715–717

school busing problem and,

734–737

sensitivity analysis and, 718–721

shadow prices and, 721–725

staffing problem and, 730–733

Lives, valuation of, 482–483

Lockheed Martin, 452

Long-run costs, 242–244, 279

constant returns to scale and, 242

cost variability and, 242

756 Index

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