In the Mastering Economics series, students use economic concepts to address issues that commonly arise in today's businesses. The focus of the series is the application of economic tools to help shape key business decisions. In the context of the virtual entertainment company CanGo, these include decisions involving the best economic climate to launch the startup company's initial public offering (IPO), entering new markets for existing products, developing new products, attracting new employees, and anticipating competition from rivals. Each episode invokes real business issues and illustrates the importance of an economic way of thinking when approaching them.

Students begin by exploring such crucial concepts as economic decision-making, supply and demand, and determining price. The context is the decision of developing new products. Students examine what factors businesses need to know in order to estimate the demand for new products such as online gaming and e-books. Students also grapple with the effects of new technologies and changing input prices on supply decisions. Determining the best prices for new products is a key issue and students evaluate pricing decisions in the context of market share, short-term profits, and long-term competition.

Tackling Rivals and Competition

Business decisions take place within the larger context of industry structure and public policy. Students explore the implications of entering new markets in terms of changing market structure. While CanGo gains a first-mover advantage by entering new markets for some of its products, students must also tackle the changing dynamics as new rivals enter and begin to compete. Students also use economic concepts to analyze the implications of new business taxes and a changing regulatory environment.

Students delve into macroeconomic issues by evaluating key decisions in light of the broader economy. Concepts of recessions and expansions are examined in the context of decision-making and the timing of CanGo's IPO launch. Monetary and fiscal policy changes impact the firm when interest rates and tax policies change at the national level. Because businesses today operate in an increasingly global environment, students must also gain exposure to changing international conditions. Students evaluate changing exchange rates, foreign competition, and turbulent economic climates overseas in light of ongoing decision-making at the virtual firm.

The Economic Way of Thinking
	CanGo is looking for ways to branch out in the e-commerce world. This episode addresses decision-making and the trade-offs that come from making various choices. Online gaming is thought to be a great way for CanGo to expand and compete, but since CanGo is a young company and has not yet settled on an IPO, it is faced with the dilemma of how to expand without the needed resources.
Supply and Demand
	CanGo is entertaining the thought of selling online games. However, before CanGo jumps in with both feet it first researches the online gaming market. The managers also consider ways to entice buyers to go to their online gaming site. This episode addresses the issue of supply and demand along with the decisions facing buyers and sellers.
Price Determination
	This episode addresses the issue of price determination in the light of ever changing market conditions. The management team at CanGo considers selling e-books. Some members of the team raise the issue that consumers may not want to give up traditional books, making this venture potentially not profitable. Others raise concerns over CanGo's ability to produce e-books at a reasonable cost.
Market Intervention
	Taxation and price controls are the focus of this episode. Also addressed are price floors and price ceilings. The latest news headline announces the possibility that the Internet will become taxed. For CanGo, if this "virtual bill" is passed it would most likely mean increased prices for its customers. The managers don't want to be caught unprepared, so the team brainstorms strategies that will help them adapt to the possibility of new taxes.
Costs and Input Markets
	This episode examines the link between inputs, costs, and productivity. CanGo's recent expansion in the e-commerce world has created the need for more employees. However, despite CanGo's growth the company is unable to compete with benefit packages and salaries that other companies are offering. The management team examines the labor market in order to come up with a solution to their hiring dilemma.
Marginal Analysis and Perfect Competition
	Since CanGo's IPO, its focus has been on ways to survive in a competitive market. Liz, CanGo's CEO, has just seen a report about online gaming subscriptions profits. She feels that going into online gaming will send a serious message to its new stockholders. The management team researches the online gaming industry to come up with a game plan. The notion of perfect competition and marginal analysis are discussed in this episode.
Imperfect Competition
	Imperfect competition and market power are key topics in this episode. This episode tries to answer the question of to set high prices or not. Andrew has found a way to put characters from one game into another. This design puts CanGo ahead of any of its competitors in the online gaming industry. Now CanGo must decide at what price it should sell its new product.
National Income (Measurement of Key Economic Data)
	CanGo is trying to decide when the timing would be ideal for launching the IPO. The newspapers are speculating that CanGo will make the offer soon. The management team scrutinizes the economic data (e.g. the Gross Domestic Product, the Consumer Price Index, the Unemployment Rate and Interest Rates) available to them in order to best answer the question of when to make a public offering.
Business Cycles
	CanGo is planning for the launch of the IPO. The CanGo team keeps their eyes on a variety of economic data to help them determine the future direction of the economy, which will determine when the IPO is launched. This episode addresses business cycles and the impact they have on the economy.
Fiscal Policy
	Tax policy is the focus of this episode. CanGo is preparing for the IPO while there are talks that Congress will implement tax cuts across the board. Some members of the management team feel that the tax cuts will impact the IPO negatively. Others feel that the tax cuts are positive because more money in people's pockets will mean more spending. The team also deals with the government spending side of fiscal policy.
Monetary Policy
	CanGo has taken all the right steps in preparation for its initial public offering. The Federal government has raised interest rates and there are rumors that this might tighten the money supply. The management team voices their concerns about what will happen to CanGo when it goes public. The role that the Federal Reserve plays in the economy is highlighted.
International Trade
	CanGo considers venturing into international markets with online gaming. The team conducts some focused market research and considers the impact that the exchange rate fluctuations will have on their global expansion. The episode addresses a number of important factors that a firm needs to consider when thinking about moving into an international market. The episode also draws connections between fluctuations in currency and the demand for a company's product in an overseas market.