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Managerial Economics A Problem Solving Approach SECOND EDITION
LUKE M. FROEB
Vanderbilt University
BRIAN T. MC CANN
Vanderbilt University
Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States
Managerial Economics: A Problem Solving Approach, Second Edition Luke M. Froeb, Brian T. McCann Vice President of Editorial, Business: Jack W. Calhoun Vice President/Editor-in-Chief: Joe Sabatino Acquisitions Editor: Michael Worls Developmental Editor: Jean Buttrom Associate Marketing Manager: Betty Jung Content Project Manager: Lindsay Bethoney Media Editor: Deepak Kumar
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For Lisa, Halley, Jake, and Chris
BRIEF CONTENTS
Preface: Teaching Students to Solve Problems SECTION I
SECTION II
Problem Solving and Decision Making 1 1 2 3 4 5
SECTION IV
SECTION V
SECTION VI
SECTION VII
Introduction: What