importance of managerial economics
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Importance Of Managerial Economics
What is the importance of managerial economics in the decision-making process of business?
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MYBROTHERMYCROFT | CERTIFIED EDUCATOR
Managerial economics serves several purposes in business decision-making. To start with, managerial economics provides a logical and experiential framework for analyzing the question. To the somewhat vague question of "what or how much should I make, and who should I sell it to?", or "should I try to retail something like 'this'?", it provides the framework for applying to your question concepts such as supply and demand, market segmentation, competition, and so on. It takes your question from something vague and applies tested concepts to frame a more precise question (and answer).
Second, it provides an opportunity for a quantitative question: "how much should I make?" or "what price should I charge?" Rather than punting at an answer, managerial economics provides either a pre-existing framework for obtaining a direct answer, or at least provides a framework for testing volume or pricing in this case.
Third, it lends meaning to the answer. If you get back an answer "price it at $88.50 if you want to sell 2,000, or at $115.50 if you want to sell 600," you have an answer with much more utility and you can both test the answer (which is important) and extrapolate, say, to production limited to 400. At this point, you have used managerial economics to help make important business decisions.
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THETALL | CERTIFIED EDUCATOR
Managerial economics is the application of economic theory to economic practice with an aim of ensuring that business decisions meet their intended goal. It is through management economics that a business understands how to access and utilize scarce resources to ensure optimal performance of the same to generate revenues and profits. The application assists in decision making with regards to issues about optimum production, profit maximizing prices and type of product among other economic variables. For instance, a manufacturing company needs to understand what type of product or which additional features would boost the utility and sales of their product. This will be determined against analyzing competitor product offerings or substitutes that exist in the market. The market research is part of economic theory and application of the information in the business when making the choice of the product is regarded as economic practice.
In a term paper, one can begin by stating the definition of managerial economics followed by its importance in business operations. It is also important to give a detailed case of how managerial economics is applied and some of the decisions that such study affects in an actual business operation.
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HOMEWORK HELP > MANAGERIAL ECONOMICS
Importance Of Managerial Economics
What is the importance of managerial economics in the decision-making process of business?
print Print
document PDF
list Cite
EXPERT ANSWERS
MYBROTHERMYCROFT | CERTIFIED EDUCATOR
Managerial economics serves several purposes in business decision-making. To start with, managerial economics provides a logical and experiential framework for analyzing the question. To the somewhat vague question of "what or how much should I make, and who should I sell it to?", or "should I try to retail something like 'this'?", it provides the framework for applying to your question concepts such as supply and demand, market segmentation, competition, and so on. It takes your question from something vague and applies tested concepts to frame a more precise question (and answer).
Second, it provides an opportunity for a quantitative question: "how much should I make?" or "what price should I charge?" Rather than punting at an answer, managerial economics provides either a pre-existing framework for obtaining a direct answer, or at least provides a framework for testing volume or pricing in this case.
Third, it lends meaning to the answer. If you get back an answer "price it at $88.50 if you want to sell 2,000, or at $115.50 if you want to sell 600," you have an answer with much more utility and you can both test the answer (which is important) and extrapolate, say, to production limited to 400. At this point, you have used managerial economics to help make important business decisions.
list Cite
link Link
THETALL | CERTIFIED EDUCATOR
Managerial economics is the application of economic theory to economic practice with an aim of ensuring that business decisions meet their intended goal. It is through management economics that a business understands how to access and utilize scarce resources to ensure optimal performance of the same to generate revenues and profits. The application assists in decision making with regards to issues about optimum production, profit maximizing prices and type of product among other economic variables. For instance, a manufacturing company needs to understand what type of product or which additional features would boost the utility and sales of their product. This will be determined against analyzing competitor product offerings or substitutes that exist in the market. The market research is part of economic theory and application of the information in the business when making the choice of the product is regarded as economic practice.
In a term paper, one can begin by stating the definition of managerial economics followed by its importance in business operations. It is also important to give a detailed case of how managerial economics is applied and some of the decisions that such study affects in an actual business operation.
list Cite
link Link
STUDENT COMMENTS
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Select a subject Literature History Science Math Arts Business Social Sciences Law and Politics Health Religion Other
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at this point you have used managerial economics To Help most important business decisions it is through management economic that s business understands how to access and utilize scare resources to ensure optimal performance of the same to generate revenue and profit
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