The Theory of the Firm

The Theory of the Firm

This course is part of Microeconomics Principles Specialization

Instructor: Dr. José J. Vázquez-Cognet

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3 modules

Gain insight into a topic and learn the fundamentals.

Beginner level

Recommended experience

9 hours to complete

Flexible schedule

Learn at your own pace

3 modules

Gain insight into a topic and learn the fundamentals.

Beginner level

Recommended experience

9 hours to complete

Flexible schedule

Learn at your own pace

What you'll learn

Learn to apply marginal returns to inputs, key firm costs, and cost changes over time.
Understand perfect competition, profit maximization, and profit-maximizing output.
Learn about market structures and distinguish marginal revenue in different firms for profitability assessment.
Explore welfare effects of market power, types of price discrimination, and its societal impact.

Skills you'll gain

Details to know

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Assessments

3 assignments

Taught in English

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This course is part of the Microeconomics Principles Specialization

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There are 3 modules in this course

In this course, we will begin covering the theory of the firm. Economists call this "The Economics of the Lemonade Stand." And that title makes perfect sense, since the concepts we cover can be used by anyone, from someone owning a lemonade stand, to a car manufacturing company, to a hair salon, to a burrito stand, etc. We will continue our discussion of the firm by focusing on those firms working in a perfectly competitive (or competitive) environment.

Also, why is it that when you fly, the person sitting next to you in the plane probably paid a different price for the ticket than what you paid for it? And why does Starbucks charge so much for its coffee even though you can buy coffee at Dunkin’ Donuts for almost half of that price? We will finish our discussion of the firm by focusing on cases that should be more familiar to you than the perfect competition examples we have been using.

Welcome! This course we will begin covering the theory of the firm. Economists call this section, "The Economics of the Lemonade Stand." And that title makes perfect sense, since the concepts we cover can be used by anyone, from someone owning a lemonade stand, to a car manufacturing company, to a hair salon, to a burrito stand, etc.

What's included

9 videos1 reading1 assignment1 discussion prompt

9 videosTotal 64 minutes

1.1. Introduction to Production5 minutes
2.1. Demonstration: The Production of Tennis Balls7 minutes
2.2. The Production Process at a Glance9 minutes
2.3. A Numerical Example: Cooks in the Kitchen7 minutes
3.1. Fixed, Variable, and Total Costs6 minutes
3.2. Marginal Costs6 minutes
3.3. Cost Curves9 minutes
4.1. Back to Black Dog4 minutes
4.2. Applications10 minutes

1 readingTotal 15 minutes

Week 5 Overview15 minutes

1 assignmentTotal 30 minutes

Week 5 Quiz30 minutes

1 discussion promptTotal 60 minutes

Week 5 Discussion Questions60 minutes

Welcome! This module we continue our discussion of the firm by focusing on those firms working in a perfectly competitive (or competitive) environment.

What's included

10 videos1 reading1 assignment1 discussion prompt

10 videosTotal 75 minutes

1.1. Introduction to Competitive Output3 minutes
2.1. The Maximizing Profit Assumption4 minutes
2.2. The Profit Equation7 minutes
2.3. The Profit Maximizing Rule11 minutes
3.1. Perfect Competition6 minutes
4.1. The Short-run Decision8 minutes
4.2. Long-run Competitive Output11 minutes
4.3. Using the Long-run Equilibrium Model11 minutes
4.4. The Long-run Supply Curve11 minutes
5.1. Conclusion to Competitive Output3 minutes

1 readingTotal 15 minutes

Week 6 Overview15 minutes

1 assignmentTotal 30 minutes

Week 6 Quiz30 minutes

1 discussion promptTotal 60 minutes

Week 6 Discussion Questions60 minutes

So, why is it that when you fly the person sitting next to you in the plane probably paid a different price for the ticket than what you paid for it? And why does Starbucks charge so much for its coffee even though you can buy coffee at Dunkin’ Donuts for almost half of that price? This module we are finishing our discussion of the firm by focusing on cases that should be more familiar to you than the perfect competition examples we have been using.

What's included

10 videos1 reading1 assignment1 discussion prompt

10 videosTotal 79 minutes

1.1. Pricing with Market Power: An Introduction4 minutes
2.1. Market Structures With Pricing Power8 minutes
2.2. Sources of Market Power12 minutes
3.1. When Marginal Revenue is Less than Price10 minutes
3.2. Marginal Revenue and the Price Elasticity of Demand6 minutes
4.1. Perfect Price Discrimination10 minutes
4.2. Imperfect Price Discrimination10 minutes
4.3. Other Pricing Strategies9 minutes
5.1. The Social Cost of Market Power7 minutes
6.1. Pricing with Market Power: Conclusion5 minutes

1 readingTotal 15 minutes

Week 7 Overview15 minutes

1 assignmentTotal 30 minutes

Week 7 Quiz30 minutes

1 discussion promptTotal 60 minutes

Week 7 Discussion Questions60 minutes

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Instructor

Dr. José J. Vázquez-Cognet

University of Illinois Urbana-Champaign

4 Courses205,860 learners

Offered by

University of Illinois Urbana-Champaign

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