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Bridgeton Industries: Automotive Component&Fabrication Plant

Satisfactory Essays

University of Toronto Department of Economics ECO 204 2010 - 2011
Sayed Ajaz Hussain Lecture 1

Ajaz Hussain. Department of Economics. University of Toronto (St. George)

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Today
About ECO 204
(Single-Variable) Functions (Single-Variable) Calculus (Single-Variable) Unconstrained Optimization (Single-Variable) Concave and Convex Functions
Ajaz Hussain. Department of Economics. University of Toronto (St. George) 2

Instructor:
Office Room 212, Economics Department 150 St. George Street Office hours Thursdays 1 – 3 pm or by appointment E-mail sayed.hussain@utoronto.ca
Ajaz Hussain. Department of Economics. University of Toronto (St. George) 3

Teaching Assistants
Head TA: Asad Priyo E-mail: asad.priyo@utoronto.ca Please …show more content…

Department of Economics. University of Toronto (St. George) 12

Ahead ..
Functions: notation
3 Classes of Optimization Problems Unconstrained Optimization Interior Solution Boundary Solution How to solve unconstrained optimization problems Concave and convex functions
Ajaz Hussain. Department of Economics. University of Toronto (St. George) 13

A Motivational Example
Source: HBS Case The Prestige Telephone Company
Prestige Telephone Company Average intercompany billing capped at $82,000/month Ri = Pi Qi “Inter company” Pi = $400/hr. → Qi = 205 hours/month “Commercial” PC = $800/hr

Other Services

Prestige Data Services

Commercial Customers

Ajaz Hussain. Department of Economics. University of Toronto (St. George)

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A Motivational Example
Exhibit 1: The Prestige Telephone Company January 2003 February 2003 March 2003 Intercompany Hours Commercial Hours Total Revenue Hours Service Hours Available Hours Total Hours 206 123 329 32 223 584 181 135 316 32 164 512 223 138 361 40 143 544

Ajaz Hussain. Department of Economics. University of Toronto (St. George)

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Commercial Demand Curve
See Excel Model 1.1 In March 2003 PC = $800, QC = 138 hours In March 2003, management feels: $800 PC ↑ by $200 → 30% ↓ QC PC ↓ by $200 → 30% ↑ QC
138
Commercial Hours
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Commercial Price

Ajaz Hussain. Department of Economics. University of Toronto (St. George)

Commercial Demand Curve and

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