Managerial Economics –
Managerial Economics is a branch of economics that studies application of principles of economics to various business situations.
A Business organization is essentially a group of people who have come together for attaining certain common objectives. These objectives are largely material in nature – eg. profits, salaries, production for the purpose of consumption, etc. The behavior of this group of people is therefore a subject matter of study for economics.
A Business Manager is responsible for leading this group of people in the direction of attainment of the objectives. In this capacity she has to take several decisions during the course of her day-to-day operations. An understanding and application of principles of economics would help the Business Manager to take appropriate decisions under various situations.
Economics- Science of making decision in the presence of scarce of resources.
Managerial Economics- How manager will direct resources in a way that most efficiently achieve a managerial goal (which is Maximize profit).
Demand: The quantities of a product that people are willing and able to purchase at various prices during some specific time period
Supply: The quantities of a product that firms are willing and able to offer at various prices during some specific time period
Elasticity: tells us how sensitively buyers and sellers react due to changes in price.
Monopoly - Only one firm
Duopoly- Two firm
An oligopoly is a market form in which a market or industry is dominated by a small number of sellers
Perfect Competition- Many sellers selling the same product.
Game Theory- a study of multi person decision problems
Nash equilibrium is a strategy profile from which no player can gain by deviating alone.
Managerial Economics is a branch of economics that studies application of principles of economics to various business situations.
A Business organization is essentially a group of people who have come together for attaining certain common objectives. These objectives are largely material in nature – eg. profits, salaries, production for the purpose of consumption, etc. The behavior of this group of people is therefore a subject matter of study for economics.
A Business Manager is responsible for leading this group of people in the direction of attainment of the objectives. In this capacity she has to take several decisions during the course of her day-to-day operations. An understanding and application of principles of economics would help the Business Manager to take appropriate decisions under various situations.
Economics- Science of making decision in the presence of scarce of resources.
Managerial Economics- How manager will direct resources in a way that most efficiently achieve a managerial goal (which is Maximize profit).
Demand: The quantities of a product that people are willing and able to purchase at various prices during some specific time period
Supply: The quantities of a product that firms are willing and able to offer at various prices during some specific time period
Elasticity: tells us how sensitively buyers and sellers react due to changes in price.
Monopoly - Only one firm
Duopoly- Two firm
An oligopoly is a market form in which a market or industry is dominated by a small number of sellers
Perfect Competition- Many sellers selling the same product.
Game Theory- a study of multi person decision problems
Nash equilibrium is a strategy profile from which no player can gain by deviating alone.
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