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What are the characteristics of managerial economics?
1. Micro econonic nature. 2.use of macro economics 3.use of theory firm 4.prospective nature 5.practical approch 6. Decision making at managerial level 7. Normative economics 8. Nature of business economics
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Managerial economics is a study of application of managerial skills in economics,more over it help to find problems or obstacles in the business and provide solution for those… problems.problems may be relating to costs,prices,forecasting the future market,human resource management,profits etc. Managerial economics is a study of application of managerial skills in economics,more over it help to find problems or obstacles in the business and provide solution for those problems.problems may be relating to costs,prices,forecasting the future market,human resource management,profits etc. Managerial economics (also called business economics ), is a branch of economics that applies microeconomic analysis to specific business decisions. As such, it bridges economic theory and economics in practice. It draws heavily from quantitative techniques such as regression analysis and correlation , Lagrangian calculus (linear). If there is a unifying theme that runs through most of managerial economics it is the attempt to optimize business decisions given the firm's objectives and given constraints imposed by scarcity, for example through the use of operations research and programming. Nature of Managerial Economics: Following points constitute nature of managerial economics 1. Micro Economics 2. Theory of the firm 3. Managerial Economics is Pragmatic (practical in outlook) 4. Managerial economics is normative 5. Using inputs from Macroeconomics 6. It is concerned with Normative Economics Scope of managerial economics: Operational issues 1. Resource Allocation 2. Demand Analysis and Forecasting 3. Cost and Production Analysis 4. Pricing Decisions, Policies and Practices 5. Profit Management 6. Capital Management 7. Strategic Planning Environmental or external issues Â· Economic Environment: Â· Social environment Â· Political Environment Â· Technological Environment Â· International environment
Managerial economics is a branch of economics this used inconjunction with business economics. It deals with microeconomicswith a focus on helping a business determine strateg…y and makedecisions about operations, pricing, production, and riskinvestments.
Managerial economics (also called business economics ), is a branch of economics that applies microeconomic analysis to specific business decisions. As such, it bridges …economic theory and economics in practice. It draws heavily from quantitative techniques such as regression analysis and correlation , Lagrangian calculus (linear). If there is a unifying theme that runs through most of managerial economics it is the attempt to optimize business decisions given the firm's objectives and given constraints imposed by scarcity, for example through the use of operations research and programming.(the things mentioned above are ___________)
It can be important when the decisions of management are related to the whole of the social system. A possible change in the forecast of the progress of the macro-economy can …result in the need for the managemental decision-making to re-align with it.
Managerial economics as defined by Edwin Mansfield is "concerned with application of economic concepts and economic analysis to the problems of formulating rational managerial… decision". It is sometimes referred to as business economics and is a branch of economics that applies microeconomic analysis to decision methods of businesses or other management units.
responsibilities of managerial eeconomic
It is mostly Micro economics and sometimes Macro economics It is application of economics in business management It helps to seek cost effective solutions hence it is norm…ative in approach it is pragmatic in nature It is prescriptive in approach
The incremental reasoning is used in accepting or rejecting a business proposition or option.. Whenever a manager takes decision he asks the question "Is it worthwhile?" The …implicit criterion is that incremental benefit of the decision should exceed its incremental costs. Decision or action is worthwhile already if the decision maker or is the firm can expect to be better off than before. Original reasoning forces manager to examine the changes in total revenues and total costs resulting for changes in production, sales, price and related decisions. Wrong decisions may follow if the focus is on the concept of average rather than on marginal analysis.. The two basic components of incremental reasoning are. 1) Incremental cost. 2) Incremental Revenue
There are several features of managerial economics. They includeassessing the market competition, following a pricing strategy, andfollowing legal regulations.
scope of managerial economics
1. Evolutionary method 2. Substitute method 3. Growth curve method 4. Opinion polling method 5. Sales experience approach 6. Correlation method 7. Controlled experiments 8. E…conomic Indicators method
There are 3 main functions of Profit:. 1) Measures performance of a firm. 2) Premium to cover costs of staying in business. 3) Ensures supply of future capital.
Incremental analysis includes two concepts Incremental cost Incremental revenue IC is the additional cost incurred for additional output. In other words changes in cost due to… changes in level of output. Whereas IR is the additional revenue from additional output or the changes in revenue due to changes in output. For every business decisions there is IR and IC. In order to determine whether the decision is sound or not we should compare the IC and IR of every decision. If the IR exceeds the IC, or IR is equal to IC the decision can be assumed as a sound decision.
Engineering economics is the body of knowledge devoted to the systematic evaluation of network of benefits resulting from proposed engineering and business ventures in relatio…n to the expenditure associated with the undertaking.
1)price of the product. 2)price of the substitute product. 3) advertisement effect. 4) consumers expectations . 5) tastes and habits . 6)climatic conditions . 7) customs… and traditions. 8) population growth. 9) number of buyers. 10 distribution of income and wealth . 11spending habits. 12taxation policy. 13 )inventions and innovations. 14)fashions . 15)age and gender.
Accounting plays a major role in managerial economics. Management needs accurate data in order to make correct decisions for a company, so accounting work must be do correctl…y and quickly in order to be analyzed and acted upon.