Question

37. Managerial utility function is expressed as

Answer 1

Answer:

U = f (S, M. ID) It will be read as : Managerial utility is a function (f) of additional expenditure on staff, managerial emoluments and discretionary investment. (Here, U = managerial utility; S = additional expenditure on staff; M = managerial emoluments and ID = discretionary investment). Economics Theories.

The managerial utility function includes variables such as salary, job security, power, status, dominance, prestige and professional excellence of managers. Of these, salary is the only quantitative variable and thus measurable. The other variables are non-pecuniary, which are non-quantifiable.