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Thompson Rivers University
Thompson Rivers University

ECON 3041: Managerial Economics

Students focus on the application of economic models and rationale choice to business decision making. Topics include an overview of managerial economics; demand and supply; costs of production and the organization of the firm; market structure and pricing and output decisions; game theory and pricing strategies; and the economics of information and the role of government in the marketplace.

Learning outcomes

  • List the different goals and constraints that firms face
  • Apply the economic way of thinking to individual decisions and business decisions
  • Use first and second order derivatives of calculus to solve for an optimum solution
  • Understand how prices get determined in markets, how market participants benefit in the form of consumer surplus and producer surplus, and what are the consequences of government intervention
  • Measure the responsiveness of consumers' demand to changes in the price of a good or service, the price of other goods and services, and income
  • Understand the different costs of production and how they affect short and long run decisions
  • Derive the equilibrium conditions for cost minimization and profit maximization
  • Understand economies of scale, diseconomies of scale, economies of scope, and cost complementarities, and how each affects the cost of production
  • Explain the principal-agent problem and why different forms of compensation exist
  • Understand the four basic market models of perfect competition, monopoly, monopolistic competition, oligopoly, and how price and quantity are determined in each model
  • Understand how game theory can be used to explain a number of business decisions
  • Explain four different pricing practices such as discrimination, two-part pricing, block pricing, commodity bundling, transfer pricing, and peak load pricing
  • Understand why there is a role for the government to play in market economies

Course topics

Module 1: Fundamentals of Managerial Economics

Module 2: Demand and Supply

Module 3: Costs of Production and the Organization of the Firm

Module 4: Market Structures: Pricing and Output Decisions

Module 5: Game Theory and Pricing Strategies

Module 6: The Economics of Information and the Role of Government in the Marketplace

Required text and materials

The following materials are required for this course:

  1. Baye, M., & Prince, J. (2022). Managerial economics and business strategy (10th ed.). McGraw-Hill.
    Type: Textbook. ISBN: 9781266071010

Additional requirements

A math calculator, preferably with several memories, square root functionality, logarithms, correlation/regression analysis, and financial analysis (e.g., present values and the internal rate of return).


Please be aware that should your course have a final exam, you are responsible for the fee to the online proctoring service, ProctorU, or to the in-person approved Testing Centre. Please contact with any questions about this.

To successfully complete this course, students must achieve a passing of 50% or higher on the overall course, and 50% or higher on the final mandatory exam.

Assignment 1: Fundamentals of Managerial Economics 12%
Assignment 2: Demand and Supply 12%
Assignment 3: Costs of Production and the Organization of the Firm 12%
Assignment 4: Market Structures 12%
Assignment 5: Game Theory and Pricing Strategies 12%
Final Exam (mandatory) 40%
Total 100%

Open Learning Faculty Member Information

An Open Learning Faculty Member is available to assist students. Students will receive the necessary contact information at the start of the course.

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