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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.
What else can I help you with?
Scopes of managerial economics?
scope of managerial economics
Nature of managerial economics?
nature of managerial economics?
Explain Managerial economics is economics applied in decision making?
Explain Managerial economics is economics applied in decision making?
Significance of managerial economics in decision making?
significance of managerial economics is decesion making
What is objective of managerial economics?
responsibilities of managerial eeconomic
Give you the concept of managerial economics?
ABAY
Scopes of managerial economics?
scope of managerial economics
Nature of managerial economics?
nature of managerial economics?
Explain Managerial economics is economics applied in decision making?
Explain Managerial economics is economics applied in decision making?
What is the role of Managerial economics in the economy of Pakistan?
what is the role of managerial economics in Pakistan
Significance of managerial economics in decision making?
significance of managerial economics is decesion making
What is objective of managerial economics?
responsibilities of managerial eeconomic
What is the importance of managerial economics principle in modern organization?
what is the importance of managerial economics principles in the modern organization?
Scope methods of economics?
about scope of managerial economics?
Incremental reasoning in managerial economics?
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
What is the Difference between economics and manegrial economics?
difference between economics and managerial economics
What has the author Lawrence Southwick written?
Lawrence Southwick has written: 'Managerial economics' -- subject(s): Managerial economics
