Background Note | HBS Case Collection | March 1999 (Revised January 2000)

A Note on Microeconomics for Strategists

by Kenneth S. Corts and Jan W. Rivkin

Abstract

Summarizes the core ideas about the microeconomics of markets that are most relevant to business strategy. Sections I and II develop two basic building blocks of any market, demand and supply. Section II discusses how demand and supply interact to determine the quantity of goods traded in a market and the price paid for those goods, with special attention to the way that external events influence the quantity traded and the price paid. Section IV presents the important benchmark of "perfect competition," in which equally matched firms compete so vigorously and market entry is so easy that no firm earns more than its cost of capital. Section V explores the ways that real markets depart form perfect competition. These departures lie at the heart of long-run profitability.

Keywords: Microeconomics; Cost; Cost of Capital; Market Entry and Exit; Business Strategy; Competition; Corporate Strategy;

Language: Vietnamese Format: Print 19 pages EducatorsPurchase

Citation:

Corts, Kenneth S., and Jan W. Rivkin. "A Note on Microeconomics for Strategists." Harvard Business School Background Note 799-128, March 1999. (Revised January 2000.)

Related Work

  1. Case | HBS Case Collection | March 2001

    Corruption in International Business (A)

    Robert E. Kennedy and Rafael M. Di Tella

    Explores various aspects of corruption in international business, in two sections. The first section provides a broad discussion of the ethical, business, and legal aspects of corruption. The second section provides a series of "caselets" that are designed to promote discussion of how students would act in particular situations, as well as the potential costs and benefits of these actions.

    Keywords: Crime and Corruption; Emerging Markets; Policy; Globalization;

    Citation:

    Kennedy, Robert E., and Rafael M. Di Tella. "Corruption in International Business (A)." Harvard Business School Case 701-128, March 2001.  View Details
    CiteView DetailsEducatorsPurchase Related

About the Author

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Jan W. Rivkin
C. Roland Christensen Professor of Business Administration
Senior Associate Dean, Chair, MBA Program
Strategy

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