I am thinking how these concepts will be applied in the industries / at a job.

For example I could see elasticity as useful in projecting the outcomes of supply shocks.

Say, there is a risk management department in a big company, which foresees alternative outcomes and hedges risks accordingly. But I see most elasticities are measured poorly in reality.

Or say the investment department looks at changes in the commodity market to work out whether there has been a supply shock or demand shock. (I think this might even be done simply by looking at the futures exchange)

I know that consumer theory has special application in labour markets, but don't see its uses anywhere else.

Do firms really work out their residual demand (under oligopoly)? For example, does Microsoft really does all the math to figure out Windows' share of pie with MacOS?

I know economics predictions are "coarse-grained", but under what degree of certainty is a company willing to act on it?

I am figuring out the direction I am headed as I study ECON, but has been fairly clueless. Please mention any advanced topics if you think it would help with an answer.

  • $\begingroup$ what do you mean by basic economics when it comes to elasticity etc? For example, elasticity is widely used almost everywhere in business or public administration but what counts as basic elasticity? With passing101 econ, without major in CS or DS and a lot of extra self study you wont be able to actually estimate any elasticity in real life. Similarly, large firms will use IO modeling and consumer choice theory directly or indirectly in building pricing models etc but none of it can be done with something that you learn in 101 econ $\endgroup$
    – 1muflon1
    Commented May 5, 2022 at 14:31
  • $\begingroup$ econ 101 is meant to give you basic building blocks for further study and maybe impart some lessons that can be generally useful IRL like consider opportunity cost, dont get confused with nominal variables, understanding the importance of division of labor or basic reasoning for trade but it has next to nothing when it comes to something that can be practically directly implemented (apart the general lessons) in business or public admin $\endgroup$
    – 1muflon1
    Commented May 5, 2022 at 14:34
  • $\begingroup$ @1muflon1 "large firms will use IO modeling and consumer choice theory directly or indirectly" I dispute this claim. $\endgroup$
    – Giskard
    Commented May 5, 2022 at 19:01
  • 1
    $\begingroup$ Is this academic journal level proof, or would you say a revision is needed? I am pretty sure you can find "data based strategic decision making" in most business school curriculums, and it will have no math beyond ratios. $\endgroup$
    – Giskard
    Commented May 5, 2022 at 19:31
  • 1
    $\begingroup$ I agree with 1muflon1 here. Many two-sided platforms such as Uber and Lyft directly estimate elasticity curves. There are several benefits, which include setting prices and estimating consumer surplus. There are several papers of academic quality such as the following: nber.org/system/files/working_papers/w22627/w22627.pdf and john-joseph-horton.com/papers/uber_price.pdf. In my experience, these analyses also often come up in economic consulting. $\endgroup$
    – qwerty
    Commented May 5, 2022 at 21:59


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