Index 757decreasing returns to scale, 243
economies of scale, 243
increasing returns to scale, 243
vs.short-run costs, 243–244
Long-run equilibrium, 292
Long-run frequency, probability
and, 501
Long-run market supply, 294–295
Long-run production, 192–196,
198–207. See alsoProduction
constant returns to scale and,
198–199
decreasing returns to scale and, 199
graphical approach and, 202–207
increasing returns to scale and, 199
isocost line and, 205
isoquants and, 202–205
least-cost production and, 200–207
marginal rate of technical
substitution and, 204–205
output elasticity and, 199
returns to scale and, 198–200
Loose oligopoly, 356M
Management pitfalls, risky decisions
and, 517–518
Marginal analysis, 27–53, 63–68
calculus and, 40–42
cost analysis and, 36–37
differential calculus and, 64–66
in fast-food franchising, 27–28,
52–53
locating a shopping mall and,
28–30
marginal cost and, 45
marginal profit and, 38–40
marginal revenue and, 45
marginal revenue and marginal
cost, 68
microchip manufacturer and,
31–38
model of the firm and, 30–38
profit analysis and, 37–38
profit maximization and, 45–47
revenue analysis and, 31–36
second derivative and, 66–68
sensitivity analysis and, 48–53
Marginal benefit curve, 298
Marginal cost, 45, 68, 239–241Marginal cost of an input, 196
Marginal-cost pricing, 333–334
Marginal product, 193–194
Marginal profit, 38–40
Marginal rate of substitution, 124–126
Marginal rate of technical
substitution (MRTS), 204–205
Marginal revenue, 45, 68, 91–94, 196
Market competition, Internet and,
303–305
Market data, uncontrolled, 132–133
Market demand, price cutting
and, 374
Market efficiency, 295–305
day-care market and, 296–302
dynamic, marketwide efficiency,
302–303
efficiency and equity, 302
marginal benefit curve and, 298
private markets and, 296–305
Market entry, 3, 414–415
Market equilibrium, 292–295
Market failure
externalities and, 455–467
imperfect information and, 467–470
regulation and, 447–455
Market-share competition, 405–408
Market skimming, price cutting
and, 374
Market structures, 284–285
Market studies, controlled, 131–132
Market supply, long-run, 294–295
Markup rule, 96
Material costs, sensitivity analysis
and, 50
Maximizing total sales, 14
Maximum profit, 40–42
McDonald’s, 27, 395, 510
McDonnell-Douglas, 452
McNees, Stephen, 165
Mean, 134
Medical costs, 589–590
Merck & Co., 15
Merger prevention, monopolies and,
451–453
Method of Lagrange multipliers,
70–71
Microchips market, 31–38, 275–277
Microsoft, 104, 252, 255, 305, 361,
375, 395, 412, 414, 452, 521–522Microsoft antitrust case, 454–455
Mineral lease, international, 417–419
Minimization problem, linear
programming and, 715–718
Minimum efficient scale, 249–251
Mixed bundling, 394–395
Mixed competitive strategies,
439–443
game of trust and, 442–443
market competition and, 439–442
Model of the firm, 30–38
Models, decision making and, 10–11
Monopolistic competition, 336–338
Monopoly
average-cost pricing and, 332–334
barriers to entry and, 322–324
breaking up existing, 450
cartels and, 329–331
government responses and,
449–453
Intel’s monopoly, 324–325
marginal-cost pricing and, 333–334
monopolistic competition,
336–338
natural monopolies, 332–336
New York City taxicabs and, 319,
339–340
perfect competition vs.pure
monopoly, 326–336
preventing collusion and, 453
preventing mergers and, 451–453
preventing practices and, 450–451
price and output decision and,
320–321
product differentiation and, 336
pure monopoly, 320–325
regulation and, 448–453
rent-seeking activity and, 449
telecommunications monopoly,
334–336
Moral hazard, 587–588, 592
Morgenstern, Oskar, 398, 522
Motivation, 602–605
Movie demand, 128, 167–168
Multicollinearity, 147
Multinational production and
pricing, 3, 101–103
Multiple-issue negotiations, 640–648
complex procurement and, 641
continuous variables and, 646–648BMIndex.qxd 9/29/11 1:28 PM Page 757