Business Microeconomics module (BU31014)

Why do some firms cut prices while rivals invest in advertising instead? How do businesses decide whether to expand, compete on price, or hold back? This module gives you the economic principles and analytical tools to answer questions like these, using real-world examples and case studies to show how firms actually operate and compete.

You will start by building your economic foundations and analytical skills, then explore how consumers and firms interact, and how different market structures, including oligopoly, shape competition between businesses. You will go on to examine the strategic choices firms make around pricing, investment, advertising, growth and expansion, and learn the quantitative techniques, including constrained optimisation and the Lagrangian method, used to analyse how firms make decisions.

Weekly lectures introduce new concepts each week, while tutorials give you the space to apply them to real problems and case studies, building your confidence working with economic reasoning in words, graphs and mathematics, and preparing you for further study in economics.

What you will learn

In this module, you will:

•  Learn the core economic principles that explain how firms behave in different market environments
• Explore consumer behaviour, firm dynamics, and market structures, including oligopoly
• Examine the strategic decisions firms make around pricing, output, competition, investment, advertising, growth and expansion
• Use constrained optimisation and the Lagrangian method to analyse firm decision-making
• Represent economic ideas using words, graphs and mathematics

By the end of this module, you will be able to:

•  Apply core economic principles to firm behaviour across a range of market environments
• Represent microeconomic ideas and analysis using words, graphs, and mathematics
• Explain how firms make strategic decisions in different market structures, including on pricing, output and competition
• Use algebraic, graphical, and conceptual reasoning, including constrained optimisation and the Lagrangian method, to analyse firm behaviour
• Apply your technical skills to solve microeconomic problems and interpret real economic outcomes

Assignments / assessment

•  Class test (40%) — assesses the more technical parts of the module
• Written exam (60%) — three-hour exam with essay-based and technical questions covering all learning outcomes

Teaching methods / timetable

•  Weekly lectures introducing key microeconomic concepts and models
• Tutorials for problem-solving practice and discussion of real-world business examples