UWSC Microeconomics Theory of The Firm Supply & Demand & Productivity Discussion The class covers three major areas. We start with the theory of the firm, where we explore the
relationship between cost and productivity, and analyze the implications of profit maximizing
behavior on factor demands and the supply of consumption commodities. We also discuss here
how firms can increase their profits by using various (non-linear) pricing techniques.
Second part of the course focuses on market (partial) equilibrium. The determination of price
and quantity of output is analyzed for the cases of perfect competition and a variety of
imperfectly competitive market structures. Also, the critical relationship between factor markets
and income distribution is explored.
Finally, the third topic exposes students to some basic game theory concepts. We analyze here
some implications of strategic behavior and explore a few basic game theoretical equilibrium
notions as well as their applicability to a variety of real-world issues such as bargaining between
unions and management or setting optimal levels for prices, quantitates and advertisement
levels.
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