Solutions for Managerial Economics, 9th Edition by William F. Samuelson
m m m m m m m m mm
,SOLUTION MANUAL FOR q q
ManagerialqEconomics,mq9thqEditionqWilliamqF.mqSamuelson,mqStephenqG.mqMarks, mqJayqL.
mqZagorsky
Chapter m 1
1. Managerial m economics m is m the m analysis m of m important m management m decisions m using m the m tools mof
meconomics. mMost mbusiness mdecisions mare mmotivated mby mthe mgoal mof mmaximizing mthe mfirm‟s mprofit. m The
m tools m of m managerial m economics m provide m a m guide m to m profit- m maximizing mdecisions.
2. i) Multinational Production and Pricing. The global automobile company needs information on 1)
m m m m m m m m m m m m
m demand m(how mmany mvehicles mcan mbe msold min meach mmarket mat mdifferent mprices), m 2) m plant m capacities
m and m production m costs, m and m3) m trade m barriers m and mtariffs.
ii) Market m Entry. m Remember m that m Uber m began m as m a m ridesharing m idea, m before m ultimately mbecoming ma
mmarket mdisruptor mwith mrespect mto mthe mlong mestablished mtaxicab mindustry. mCrucial mnecessary minformation mand
mquestions minclude: mWould mcity mregulators mallow mUber mto moperate mat mall? mWhat mmarket m niche m(how mmuch
mdemand) mcould mit mcarve mout mof mthe mtaxi m and mcar mservice m markets? mAt mwhat mprices mrelative mto mtaxis? mWould
mcustomers mtrust ma mrideshare mservice? mHow m many mdrivers mcould mrideshare mfirms mattract mand mat m what mcosts?
iii) Building m a m New m Bridge. m The mauthority mshould mestimate musage mof mthe mbridge mover mits museful mlife,
mthe mlikely mcost mof mbuilding mand mmaintaining mthe mbridge, mand mother mimportant
side-effects, mpro mand mcon m-- mincluding mpositive meffects mon mbusiness mactivity mand mthe mimpacts m on mair
mpollution mand mtraffic mcongestion.
iv) A m Regulatory mProblem. mBefore mdeciding mwhether mto mpromote mthe moil-to-coal mconversion, mgovernment
mregulators mneed minformation mon mhow mmuch moil mwould mbe msaved m(and mthe mdollar m value mof msavings) mand
mthe mcost mof mthe mchain mof mside-effects m-- mnot monly mthe mdirect mcost mof m electricity mprovision mbut malso
mpollution mcosts mand menvironmental mdamage.
, v) Boeing m and m the m 737 m Max. m Boeing m gathered m extensive m information m on m potential m airline mdemand mfor ma
mnew mmore mfuel-efficient maircraft, myet mconsiderable muncertainty mremained mwith mrespect m to m future m orders.
m Would m the m new m aircraft m shift m significant m orders m and m sales m from mAirbus, mBoeing‟s mlongtime mrival?
mCould mBoeing machieve mits maggressive mR&D mand mproduction mplan mon mbudget mand mon mschedule? mCould mit
maddress mand msolve mmyriad mreliability mand msafety m problems, mbig mand msmall? mHow msevere mwould mbe mongoing
mregulatory moversight mand mhow mhigh ma mbar m would m the m FAA m set m for m certification m requirements? m Five m or
m ten m years m from m now, m would mthe m world m economy mcontinue m to m grow, m fueling m strong mdemand m for m air
m travel m and m for m the m new mand mimproved maircraft?
vi) An m R&D m Decision. m The mpharmaceutical mcompany mshould mquiz mits mscientists mon mthe mchances mof msuccess
m(and mthe mtimetable mfor mcompletion) mfor meach mR&D mapproach. mThe mcompany's m marketing mdepartment
mwould msupply mestimates mof mpossible mrevenues mfrom mthe mdrug; mits mproduction mdepartment mwould mestimate
mpossible mcosts.
vii) David Letterman. mDave mmust mcarefully massess mwhat mhe mwants mfrom ma mnew mcontract m(in m particular mhow mmuch
m
mhe mvalues mthe mearlier mtime mslot). mAs mthe mnegotiations munfold, mDave mwill m glean mvaluable minformation mas mto
mthe mcurrent mcompeting moffers mof mCBS mand mNBC. mOf mcourse, mDave mmust malso mtry mto massess mhow mfar mthe mtwo
mnetworks mmight mbe mwilling mto mgo min m sweetening m their moffers.
3. The m six m steps m might m lead m the m soft-drink m firm m to m consider m the m following m questions. m Step m 1: mWhat m is
m the m context? m Is m this m the m firm‟s m first m such m soft m drink? m Will m it m be m first m to m the mmarketplace, mor mis mit
mimitating ma mcompetitor? mStep m2: mWhat mis mthe mprofit mpotential mfor msuch ma m drink? mWould mthe mdrink machieve
mother mobjectives? mIs mthe mfruit mdrink mcomplementary mto mthe m firm‟s mother mproducts? mWould mit menhance mthe
mfirm‟s mimage? mStep m3: mWhich mof msix mversions mof m the m drink m should m the m firm m introduce? m When m (now m or
m later) m and m where m (regionally, m nationally, mor minternationally) mshould mit mintroduce mthe mdrink? mWhat mis man
mappropriate madvertising mand m promotion m policy? m Step m 4: m What m are m the m firm‟s m profit m forecasts m for m the
m drink m in m its m first, msecond, m and m third m years? m What m are m the m chances m that m the m drink m will m be m a m failure
m after m 15 mmonths? mShould mthe mfirm mtest mmarket mthe mdrink mbefore mlaunching mit? mStep m5: mBased mon mthe
m answers mto mthe mquestions min mSteps m1 mthrough m4, mwhat mis mthe mfirm‟s mmost mprofitable mcourse mof maction? mStep m6:
mIn mlight mof mexpected m(or munexpected) mdevelopments min mthe mfirst myear mof mthe m launch, mhow mshould mthe mfirm
m modify mits mcourse mof maction?
,
m m m m m m m m mm
,SOLUTION MANUAL FOR q q
ManagerialqEconomics,mq9thqEditionqWilliamqF.mqSamuelson,mqStephenqG.mqMarks, mqJayqL.
mqZagorsky
Chapter m 1
1. Managerial m economics m is m the m analysis m of m important m management m decisions m using m the m tools mof
meconomics. mMost mbusiness mdecisions mare mmotivated mby mthe mgoal mof mmaximizing mthe mfirm‟s mprofit. m The
m tools m of m managerial m economics m provide m a m guide m to m profit- m maximizing mdecisions.
2. i) Multinational Production and Pricing. The global automobile company needs information on 1)
m m m m m m m m m m m m
m demand m(how mmany mvehicles mcan mbe msold min meach mmarket mat mdifferent mprices), m 2) m plant m capacities
m and m production m costs, m and m3) m trade m barriers m and mtariffs.
ii) Market m Entry. m Remember m that m Uber m began m as m a m ridesharing m idea, m before m ultimately mbecoming ma
mmarket mdisruptor mwith mrespect mto mthe mlong mestablished mtaxicab mindustry. mCrucial mnecessary minformation mand
mquestions minclude: mWould mcity mregulators mallow mUber mto moperate mat mall? mWhat mmarket m niche m(how mmuch
mdemand) mcould mit mcarve mout mof mthe mtaxi m and mcar mservice m markets? mAt mwhat mprices mrelative mto mtaxis? mWould
mcustomers mtrust ma mrideshare mservice? mHow m many mdrivers mcould mrideshare mfirms mattract mand mat m what mcosts?
iii) Building m a m New m Bridge. m The mauthority mshould mestimate musage mof mthe mbridge mover mits museful mlife,
mthe mlikely mcost mof mbuilding mand mmaintaining mthe mbridge, mand mother mimportant
side-effects, mpro mand mcon m-- mincluding mpositive meffects mon mbusiness mactivity mand mthe mimpacts m on mair
mpollution mand mtraffic mcongestion.
iv) A m Regulatory mProblem. mBefore mdeciding mwhether mto mpromote mthe moil-to-coal mconversion, mgovernment
mregulators mneed minformation mon mhow mmuch moil mwould mbe msaved m(and mthe mdollar m value mof msavings) mand
mthe mcost mof mthe mchain mof mside-effects m-- mnot monly mthe mdirect mcost mof m electricity mprovision mbut malso
mpollution mcosts mand menvironmental mdamage.
, v) Boeing m and m the m 737 m Max. m Boeing m gathered m extensive m information m on m potential m airline mdemand mfor ma
mnew mmore mfuel-efficient maircraft, myet mconsiderable muncertainty mremained mwith mrespect m to m future m orders.
m Would m the m new m aircraft m shift m significant m orders m and m sales m from mAirbus, mBoeing‟s mlongtime mrival?
mCould mBoeing machieve mits maggressive mR&D mand mproduction mplan mon mbudget mand mon mschedule? mCould mit
maddress mand msolve mmyriad mreliability mand msafety m problems, mbig mand msmall? mHow msevere mwould mbe mongoing
mregulatory moversight mand mhow mhigh ma mbar m would m the m FAA m set m for m certification m requirements? m Five m or
m ten m years m from m now, m would mthe m world m economy mcontinue m to m grow, m fueling m strong mdemand m for m air
m travel m and m for m the m new mand mimproved maircraft?
vi) An m R&D m Decision. m The mpharmaceutical mcompany mshould mquiz mits mscientists mon mthe mchances mof msuccess
m(and mthe mtimetable mfor mcompletion) mfor meach mR&D mapproach. mThe mcompany's m marketing mdepartment
mwould msupply mestimates mof mpossible mrevenues mfrom mthe mdrug; mits mproduction mdepartment mwould mestimate
mpossible mcosts.
vii) David Letterman. mDave mmust mcarefully massess mwhat mhe mwants mfrom ma mnew mcontract m(in m particular mhow mmuch
m
mhe mvalues mthe mearlier mtime mslot). mAs mthe mnegotiations munfold, mDave mwill m glean mvaluable minformation mas mto
mthe mcurrent mcompeting moffers mof mCBS mand mNBC. mOf mcourse, mDave mmust malso mtry mto massess mhow mfar mthe mtwo
mnetworks mmight mbe mwilling mto mgo min m sweetening m their moffers.
3. The m six m steps m might m lead m the m soft-drink m firm m to m consider m the m following m questions. m Step m 1: mWhat m is
m the m context? m Is m this m the m firm‟s m first m such m soft m drink? m Will m it m be m first m to m the mmarketplace, mor mis mit
mimitating ma mcompetitor? mStep m2: mWhat mis mthe mprofit mpotential mfor msuch ma m drink? mWould mthe mdrink machieve
mother mobjectives? mIs mthe mfruit mdrink mcomplementary mto mthe m firm‟s mother mproducts? mWould mit menhance mthe
mfirm‟s mimage? mStep m3: mWhich mof msix mversions mof m the m drink m should m the m firm m introduce? m When m (now m or
m later) m and m where m (regionally, m nationally, mor minternationally) mshould mit mintroduce mthe mdrink? mWhat mis man
mappropriate madvertising mand m promotion m policy? m Step m 4: m What m are m the m firm‟s m profit m forecasts m for m the
m drink m in m its m first, msecond, m and m third m years? m What m are m the m chances m that m the m drink m will m be m a m failure
m after m 15 mmonths? mShould mthe mfirm mtest mmarket mthe mdrink mbefore mlaunching mit? mStep m5: mBased mon mthe
m answers mto mthe mquestions min mSteps m1 mthrough m4, mwhat mis mthe mfirm‟s mmost mprofitable mcourse mof maction? mStep m6:
mIn mlight mof mexpected m(or munexpected) mdevelopments min mthe mfirst myear mof mthe m launch, mhow mshould mthe mfirm
m modify mits mcourse mof maction?
,
