Thanks to the success of previous editions and feedback from users around the world, I once again have the opportunity to offer an updated and improved product. Before highlighting some of the new features of the fifth edition of Managerial Economics and Business Strategy, I would like to stress that the fundamental goal of the book - providing students with the tools from intermediate microeconomics, game theory, and industrial organization that they need to make sound managerial decisions - has not changed.

This book begins by teaching managers the practical utility of basic economic tools such as present value analysis, supply and demand, regression, indifference curves, isoquants, production, costs, and the basic models of perfect competition, monopoly, and monopolistic competition. Adopters and reviewers also praise the book for its real-world examples and because it includes modern topics not contained in any other single managerial economics textbook: oligopoly, penetration pricing, multistage and repeated games, foreclosure, contracting, vertical and horizontal integration, networks, bargaining, predatory pricing, principal–agent problems, raising rivals' costs, adverse selection, auctions, screening and signaling, search, limit pricing and a host of other pricing strategies for firms enjoying market power. This balanced coverage of traditional and modern microeconomic tools makes it appropriate for a wide variety of managerial economics classrooms. An increasing number of business schools are adopting this book to replace (or use alongside) managerial strategy texts laden with anecdotes but lacking the microeconomic tools needed to identify and implement the business strategies that are optimal in a given situation.

This fifth edition of Managerial Economics and Business Strategy retains all the content that made previous editions a success, but adds a number of new classtested features. These include additional end-of-chapter problems, updated data, and new examples throughout the text hand-picked to drive home the global nature of our modern economic landscape. A new Case Study in business strategy - entitled Challenges at Time Warner - follows Chapter 14 and can be used either as a capstone case for the course or to supplement individual chapters. This case, prepared especially for the text, is designed to allow students to apply core elements from managerial economics to a remarkably rich business environment. Instructors can use the case as the basis for an "open-ended" discussion of business strategy, or they can assign specific "memos" (at the end of the chapter or on the accompanying Learning CD) that require students to apply specific tools from managerial economics to the case.

While all material has been updated and improved where appropriate, the basic structure of the text is unchanged.