How Microeconomics Works Within a Firm
DOI:
https://doi.org/10.33423/jabe.v27i1.7492Keywords:
business, research, microeconomics, average cost and revenue, marginal cost and revenue, fixed and variable cost, opportunity cost, indifference curve, utility function, risk and return, capital budgetingAbstract
While it is a widespread practice for business majors to take the microeconomics course in the early years of their college education, for most students it is followed by courses in other disciplines such as accounting, finance, and marketing. In turn, in these disciplines, the formulation of theory, models and examples involve use of nomenclature specific to that discipline such as accounting and financial performances. Sometimes the word “economic” measure does appear in these discipline specific courses. Many of these concepts and models with resulting measures though perceived to be developed in different business disciplines, they originate from or developed utilizing the micro economic theory. In this study, we plan to link together the microeconomic theory and its applications in development of concepts and models in other disciplines so that student and practitioners will be able tie in a seamless manner, and if necessary, modify these concepts to apply and solve business issues in a firm.
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