Managerial Economics and Strategy, 2/e

1 Introduction

An Economist’s Theory of Reincarnation: If you’re good, you come back on a higher level. Cats come back as dogs, dogs come back as horses, and people—if they’ve been very good like George Washington—come back as money.

If all the food, clothing, entertainment, and other goods and services we wanted were freely available, no one would study economics, and we would not need managers. However, most of the good things in life are scarce. We cannot have everything we want. Consumers cannot consume everything but must make choices about what to purchase. Similarly, managers of firms cannot produce everything and must make careful choices about what to produce, how much to produce, and how to produce it. Studying such choices is the ...