HBS Core - Economics for Managers
1. Total Surplus. Sum of Producer and Consumer Surplus: A market's equilibri-
um outcome maximizes
2. Auctions are more effective when valuations are within a narrow range,
ensuring that the sale price will be close to the WTP of the second highest
bidder: Are auctions more effective when buyers' valuations are within a narrow
range? Or when buyers' valuations are widely spread out?
3. Increase. Buyers should be willing to pay more for their products: As a
business that exhibits network effects gains market share, buyers' WTP should
4. Increases. The more substitute goods are available, the less willing con-
sumers will be to put up with increases in price: As more substitute goods
become available, price elasiticity of demand
5. Increases. The more available are subtitute goods, the less willing con-
sumers will be to put up with increases in price: As more substitute goods
become available, price elasticity of demand . Why?
6. Increases. The higher the price, the less willing consumers will be to put
up with additional increases in price: As price increases, the price elasticity of
demand ? Why?
7. Increases. The higher the price, the less willing consumers may be to
accomodate further increases in price: As price of a product increase, the price
elasiticity of demand for that product
8. Market Equilibrium: At what point in the demand/supply curve do all buyers and
all sellers participate in the transaction?
9. Exponential: Businesses that exhibit network effects may experience growth
10. Specialized survey that determines consumers' preferences for individual
features of a product by first ranking the importance of features and then
assigning values to each product attribute based on those features: Conjoint
Analysis - Definition
11. Value to Buyers = WTP - Price: Consumer Surplus
12. Measure of the responsiveness in one variable to a change in another
variable.
e = % change in quantity/ % change in price: Elasticity - Definition & Formula
13. Elasticity vaires along a linear demand curve while slope remains con-
stant: Elasticity vs Slope
14. 1) Pair Wise Rankings
2) Infer Value from Rankings: Elements of Conjoint Analysis
15. High: High fixed costs lead to minimum efficient scales of operation for a
firm
16. Increased Demand: Price Increases & Quantity Increases
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1. Total Surplus. Sum of Producer and Consumer Surplus: A market's equilibri-
um outcome maximizes
2. Auctions are more effective when valuations are within a narrow range,
ensuring that the sale price will be close to the WTP of the second highest
bidder: Are auctions more effective when buyers' valuations are within a narrow
range? Or when buyers' valuations are widely spread out?
3. Increase. Buyers should be willing to pay more for their products: As a
business that exhibits network effects gains market share, buyers' WTP should
4. Increases. The more substitute goods are available, the less willing con-
sumers will be to put up with increases in price: As more substitute goods
become available, price elasiticity of demand
5. Increases. The more available are subtitute goods, the less willing con-
sumers will be to put up with increases in price: As more substitute goods
become available, price elasticity of demand . Why?
6. Increases. The higher the price, the less willing consumers will be to put
up with additional increases in price: As price increases, the price elasticity of
demand ? Why?
7. Increases. The higher the price, the less willing consumers may be to
accomodate further increases in price: As price of a product increase, the price
elasiticity of demand for that product
8. Market Equilibrium: At what point in the demand/supply curve do all buyers and
all sellers participate in the transaction?
9. Exponential: Businesses that exhibit network effects may experience growth
10. Specialized survey that determines consumers' preferences for individual
features of a product by first ranking the importance of features and then
assigning values to each product attribute based on those features: Conjoint
Analysis - Definition
11. Value to Buyers = WTP - Price: Consumer Surplus
12. Measure of the responsiveness in one variable to a change in another
variable.
e = % change in quantity/ % change in price: Elasticity - Definition & Formula
13. Elasticity vaires along a linear demand curve while slope remains con-
stant: Elasticity vs Slope
14. 1) Pair Wise Rankings
2) Infer Value from Rankings: Elements of Conjoint Analysis
15. High: High fixed costs lead to minimum efficient scales of operation for a
firm
16. Increased Demand: Price Increases & Quantity Increases
1/4
