FOUNDATIONS OF BUSINESS ECONOMICS - Markets and Prices

Sep 17, 2026

Uploaded by Blaney

Foundations of Business Economics explains microeconomic analysis through practical, real-world business situations rather than highly technical theory. It covers the economic way of thinking, the business environment, product markets, factor markets, and general equilibrium. The discussion highlights how markets connect interdependent activities and how information problems are faced and resolved. The book emphasizes accessibility by keeping mathematics and technical detail minimal, making it useful for students and economics specialists alike.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages220

Reading Time9 h 14 min

AccessFree to download

Contents

Part I Introduction

Part II The business environment

Part III Product markets

Part IV Factor markets

Part V Conclusion

FOUNDATIONS OF BUSINESS ECONOMICS Much of the literature for business economics courses has tended to be highly technical and theoretical. Foundations of Business Economics redresses this imbalance by focusing on real-life business situations. The book provides a readable explanation of microeconomic analysis in terms of real business practice. The author looks at the various issues involved, including: the economic way of thinking; the business environment; product markets; factor markets; and general equilibrium. The underlying theme is the way in which markets link together interdependent economic activities, so the discussion begins in an individual bookshop and ends with general equilibrium models of the entire economic system. On the way, attention is paid to markets facing and resolving problems of information. The book is largely free of mathematics and technical detail and is therefore easily accessible. It will be particularly valuable to those students who are primarily interested in the human side of industry and economic specialists feeling the need to come down to earth from the austere heights of pure theory. Harry Townsend is Emeritus Professor of Economics at Lancaster University. He helped organise the Edwards Seminars in Industrial Administration and has played a key role in establishing business economics as a subject. FOUNDATIONS OF BUSINESS ECONOMICS Markets and Prices Harry Townsend London and New York First published 1995 by Routledge 11 New Fetter Lane, London EC4P 4EE This edition published in the Taylor & Francis e-Library, 2002. Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 © 1995 Harry Townsend All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage and retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data A catalogue record for this book has been requested ISBN 0-415-12073-x (hbk) ISBN 0-415-12074-8 (pbk) ISBN 0-203-01878-8 Master e-book ISBN ISBN 0-203-20645-2 (Glassbook Format) CONTENTS List of figures viii List of tables x Preface xi Part I Introduction 1 THE ECONOMIC WAY OF THINKING 3 Introduction 3 Substituting inputs in production 5 Substituting one product for another 7 Opportunity cost 10 Economic cost and accounting cost 13 Summary 16 Memo 17 Part II The business environment 2 FIRMS, MARKETS AND INDUSTRIES 21 Firms 21 Markets 24 Industries 28 Summary 30 3 AIMS OF BUSINESS 31 Introduction 31 The meaning of profit maximisation 32 Forms of organisation 34 Pressures for profit maximisation 43 Summary 45 CONTENTS Part III Product markets 4 THREE MEANINGS OF COMPETITION 49 Competitive activity 49 Competition as a social process 54 Competitive market structures 55 Summary 58 5 PURE COMPETITION, PERFECT COMPETITION AND EFFICIENT MARKETS 59 Introduction 59 Short-run adjustments and quasi-rents 60 Long-run equilibria: supply and economic rent 63 Pure competition and the London cab trade 68 Efficient markets: the Turf and the Stock Exchange 72 Summary 77 6 MONOPOLY AND ECONOMIC WELFARE 79 Introduction 79 Monopoly equilibrium 80 Monopoly and economic welfare 83 Price discrimination 88 Summary 94 7 OLIGOPOLY: INTERDEPENDENT DECISIONS 96 Introduction 96 Some early theories 97 Game theory 100 Tacit collusion 103 Open collusion: cartels 107 Cost-plus pricing 111 Summary 113 8 MARKET PROBLEMS: INFORMATION, EXTERNALITIES AND PROPERTY RIGHTS 115 Introduction 115 The economics of ignorance 116 Markets and the environment 122 Markets a

FAQs

What is the main focus of Foundations of Business Economics?

It focuses on explaining microeconomic analysis in terms of real business practice, linking interdependent market activities through practical problems.

Which topics are covered across product and factor markets?

The book covers issues in product markets, factor markets, and general equilibrium, including competition, monopoly, information, externalities, and property rights.

Why does the book remain easy to access for students?

It largely avoids mathematics and technical detail, making the material readable and approachable for learners interested in the human side of industry.

Sep 17, 2026

Uploaded by Blaney

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