Industrial Economics is the study of firms, industries, and markets as it looks at firms of all sizes – from local shops to giants in the market. It considers a whole range of industries, such as electricity generation and car production.
Industrial Economics helps us understand such issues as:
a) The levels at which capacity, output, and prices are set;
b) The extent that products are differentiated from each other;
c) How much firms invest in research and development (R&D)
d) How and why firms advertise.
One of the key issues in industrial economics is assessing whether a market is competitive. Competitive markets are normally good for consumers so most industrial economics courses include analysis of how to measure the extent of competition in markets. Industrial Economics uses theoretical models to understand firm and regulatory decision making.
