The Business of Business
In This Chapter
• Production decisions and how they are made
• How to analyze a business’s cost structure
• All about economies of scale
• How monopolies and cartels operate
Having examined the consumer in some depth, let’s take a look at his counterpart, the producer. Everything that makes its way into the market, every good or service that’s up for sale, must somehow be produced. In Adam Smith’s world, the butcher, the baker, and the candlestick maker are guided in their production decisions by the famous “invisible hand.” Modern economists, however, have worked hard to make that hand at least partly visible.
In this chapter, we learn how production decisions are made, how fixed and variable costs ...