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Divided into four sections, this text is written for a one-semester 2nd/3rd year/MBA course in managerial economics, business policy, competitive strategy or strategic management. Part 1 focuses on the boundaries of the firm while covering the economics of the firm, transaction costs, economies of scale and scope, and diversification. Part 2 covers industrial organization economics, including traditional I/O topics such as market structure, and modern I/O topics such as dynamic price competition. Part 3 covers strategic positioning and dynamics providing an economic foundation for topics such as generic strategies and sustainable advantage. Part 4 covers topics associated with internal organization, covering agency theory, the economics of organization design, and the interface between economics and organization theory.