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Decision-making can be significantly influenced by elasticity, which measures how responsive the quantity demanded or supplied is to changes in price. For businesses, understanding price elasticity helps in setting optimal pricing strategies; for instance, if demand is elastic, a price increase could lead to a substantial drop in sales, prompting a reevaluation of pricing. Similarly, in public policy, knowing the elasticity of goods can guide decisions on taxation and subsidies, as these can impact consumer behavior and overall economic welfare. Therefore, elasticity serves as a critical factor in evaluating potential outcomes of various decisions.
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To arrive at an economic decision a decision making grid may be used to evaluate?
Alternative choices of action.
With proper illustrations explain in what way concept of elasticity of demand has implication on manegerial decision making process?
Elasticity is a powerful and elegant concept and measures the response or sensitivity of one economic variable against change in another. Such measurement is important to producers because it in turn helps them to understand the impact of an economic action undertaken and thereby helps in decision making. One economic variable is price whose response is often sought on another economic variable which is quantity demanded. A producer such as a bakery owner may be interested in finding out how a price rise affects how many loaves of bread he sells in his store. The bakery owner may be thinking, "If I raise the price of the bread in my store by Rs.5, will this reduce significantly the number of breads that I sell, or will it just reduce it by an insignificant number?" As a business owner, this is indeed an important question to him because he does not want to adopt a pricing policy, if possible, that will make him lose too many customers and erode the revenue from sales. Understanding the concept of price-elasticity of demand can help him in his decision making process of whether to raise the price or not.
Explain the Limitations of Herbet simon's model of decision making?
Herbert Simon's model of decision-making, which emphasizes bounded rationality, has several limitations. First, it oversimplifies the complexity of human behavior by assuming that individuals have cognitive constraints that limit their rationality, potentially neglecting the influence of emotions and social factors on decision-making. Additionally, the model often assumes that decision-makers have access to sufficient information, which may not be the case in real-world scenarios. Finally, Simon's focus on problem-solving may overlook the importance of creativity and innovation in the decision-making process.
Explain the factors that influence the elasticity of pricing goods?
The elasticity of pricing goods is influenced by several factors, including the availability of substitutes, the necessity of the product, and consumer income levels. For instance, goods with many substitutes tend to have higher price elasticity, as consumers can easily switch to alternatives if prices rise. Additionally, necessities tend to be inelastic since consumers will buy them regardless of price changes, while luxury items may exhibit greater elasticity. Lastly, changes in consumer income can affect demand elasticity, as higher incomes may lead to increased demand for luxury goods, making them less sensitive to price changes.
Why are there trade-offs in decision-making processes?
Trade-offs exist in decision-making processes because individuals and organizations often have limited resources, such as time, money, and energy. When making a decision, one must weigh the benefits and drawbacks of different options and make choices based on what is most important or feasible given these constraints. This means that selecting one option may require sacrificing another, leading to trade-offs in decision-making.
What characteristics of normal lung tissue are missing from diseased tissue?
the two main characteristics of normal lung tissue that may be affected in diseased individuals are either Compliance or Elasticity. compliance is the characteristic of lung tissue that allows it to expand elasticity is the characteristic of lung tissue that allows it go back to its former shape and size. elasticity is usually affected in chronic obstructive conditions like emphysema compliance is usually affected in restrictive lung dysfunctions like pulmonary fibrosis.
What is other-directed decision making?
Other directed decision making is a key component to making what you may consider the right decision at the time it needs to be made. the key is to be objective to all options.
Is rational decision making different from decision making?
Rational decision making is a type of decision making that involves a systematic process of evaluating options based on logic and facts to achieve the best outcome. Decision making, on the other hand, is a broader term that encompasses all processes involved in choosing between different alternatives, which may or may not always be rational.
To arrive at an economic decision a decision making grid may be used to evaluate?
Alternative choices of action.
What is at stake when making an ethical decision?
When making an ethical decision, morals are at stake. You may want to think it through thoroughly before making any choice that would compromise your morals.
Issues in strategic decision making?
§ A company would have different people in decision making at different periods of time. Decision often require judgments and thus is important to note that the person related factors are important in decision making and the decision make differ as that person changes. § Again an individual does not take decisions alone. But often there is rumble in decisions, which could be between individual and group decision making. The decision taken by the group could be different from those that may be taken by the individual themselves. § The company would need to decide on what criteria it should make its decision. Thus it need a process of objective setting, which serve as benchmarks for evaluation of the efficiency and effectiveness of the decision making process. There are three major criteria in decision making- the concept of maximization, - the concept of satisfying, -the concept of instrumentalism. Based on the chosen concept, Strategic decisions will differ. § It is assumed that decision making is logical and thus there will be rationality in the decision making. In the context of Strategic decision making, it means that there would be a proper evaluation and then exercising a choice from among various alternative courses of action in such a way that it may lead to the achievement of the objectives in the best possible manner. § As the situations are complex, straightforward thinking may not be effective. Creativity in decision making may be needed, thus the decision must be original and different. But also based on situation and circumstances there could be variability in decision making.
Why does separation of powers delay decision making?
The President and the Congress may disagree.
Challenges facing managers in regards to decision making?
Opinions may vary. One challenge that faced managers is making the right decision to a tough problem given a limited time.
What are the disadvantages of having shareholders?
One disadvantage of having shareholders is that they may not know a lot about the business but they have a voting right in the direction the company takes. Shareholders may delay the decision making process when they form the considerable part of decision making.
With proper illustrations explain in what way concept of elasticity of demand has implication on manegerial decision making process?
Elasticity is a powerful and elegant concept and measures the response or sensitivity of one economic variable against change in another. Such measurement is important to producers because it in turn helps them to understand the impact of an economic action undertaken and thereby helps in decision making. One economic variable is price whose response is often sought on another economic variable which is quantity demanded. A producer such as a bakery owner may be interested in finding out how a price rise affects how many loaves of bread he sells in his store. The bakery owner may be thinking, "If I raise the price of the bread in my store by Rs.5, will this reduce significantly the number of breads that I sell, or will it just reduce it by an insignificant number?" As a business owner, this is indeed an important question to him because he does not want to adopt a pricing policy, if possible, that will make him lose too many customers and erode the revenue from sales. Understanding the concept of price-elasticity of demand can help him in his decision making process of whether to raise the price or not.
Are emotions affected by your judgment?
Yes, emotions can influence your judgment by impacting your thoughts, beliefs, and decision-making processes. For example, feeling angry may cause you to make impulsive or rash decisions, while feeling happy may lead to more optimistic or risk-taking behaviors. It's important to be aware of your emotions when making judgments to prevent bias and ensure logical reasoning.
Explain the Limitations of Herbet simon's model of decision making?
Herbert Simon's model of decision-making, which emphasizes bounded rationality, has several limitations. First, it oversimplifies the complexity of human behavior by assuming that individuals have cognitive constraints that limit their rationality, potentially neglecting the influence of emotions and social factors on decision-making. Additionally, the model often assumes that decision-makers have access to sufficient information, which may not be the case in real-world scenarios. Finally, Simon's focus on problem-solving may overlook the importance of creativity and innovation in the decision-making process.
