managerial economics assignment help

managerial economics assignment help

Managerial Economics: Enhancing Decision-Making for Managers

1. Introduction to Managerial Economics

First, the unconventional diagnosis emphasized the inconsistencies in the specific or statistical models, the difficulty in the precision of measuring the variables, and the conclusions. But finally, several economists concluded that the decision-making point of view, if not fully formal, finally led to better decision selection. This point of view, a recommendation by Hickester, holds that statistically-oriented models finally become instrumental in the managerial decision-making process as inputs to a formal optimization model, as long as one recognizes that a human acting manager will ultimately make that final decision. This managerial economics course at a school of business should ultimately become a course in advanced decision theory, permitting them to be impervious to mathematics and go out and behave as aggressive negotiators.

This article is aimed primarily at counterparts who have a functional background in business decision-making. Entrepreneurs working in all three sectors of the economy (private, nonprofit, and government) may find it useful in conducting their economic evaluations and decision-making. First, by way of central context, this article begins with an introduction to managerial economics with an analytical framework science, followed by an explanation of decision-making underlying managerial economics. Second, I hope by defining the simplest shapes within the problem because of its catered audience, these managers can become better economic evaluators, and last, an intrinsic problem in the non-professional sector as well. The beginner student of managerial economics may gain some perspective on its science. The goal of this article is, therefore, to help managers in the overall economy practice economic principles in their applied decision-making.

2. Demand Analysis and Forecasting

Now, the decision-making ability you have is only the first step. The next and critical step is to determine if the decisions you are about to make would lead to a cash-flow positive result. In other words, would it create wealth? The topic in your first course in microeconomics took into account economics, weight being placed on the scarcity of goods. In this course, when we take a demand analysis, we hardly need such a notion. As such, we would identify demand as how the consumer behaves to maximize his satisfaction given his limited resources, contrasting with the prior course where the focus was on how the consumer maximizes his satisfaction given his limited resources. And as such, in this course, our focus is on the consumer and on the supply side. What is unique about ‘managerial economics’? We need to frame this subject well so that we have a separate identity. In this framing, we note that MBA students, after graduation, enter the job market and work in industry.

Managerial economics: Enhancing decision-making for managers. You must have wondered why, in fact, you should be taking a course on managerial economics. After all, you have taken intermediate microeconomics in your earlier years and you have also possibly taken an MBA course on microeconomics. Here might be some reasons. You are, in essence, a decision maker. You have to make decisions in your organization on a daily basis. What types of decisions? You have to decide on how prices should be set, how products should be priced, what the future demand for your products would be, how production should be carried out, how many laborers you should hire and at what wage rates, whether you should make the inputs, including assembly parts, yourself or buy them from others, what the labor mix should be inclusive of managers and workers, etc.

3. Cost and Production Analysis

The function and behavior of long-run costs are important for firms in selecting from alternative production processes. When firms want to understand changes in demand for their products or the relationship between demand for a number of their products, they rely on short-run cost analysis. We apply this knowledge to several different issues related to the firm in the product market. Cost of Production, Profit, and Demand: Firms produce output and this involves costs. The relationship between the short-run cost (i.e. change in cost as output changes) and the firm’s demand functions is the same relationship between the production function and the firm’s demand. Furthermore, the relationship between cost and production functions is the relationship between production functions and sales revenue or profit function. Changes in costs result in changes in profits and a firm’s demand depends on profit per unit (π) of product and the quantity of output (i.e. π(f, Q)). A brief restatement of the arguments will make this point obvious.

In this chapter, we will see how the cost of production, profit, and demand function of the firm are related. We are going to discuss a few important concepts relating to production. As the firms produce output, they incur costs. The two major types are long-run costs and short-run costs. The short run is the period in which some factors of production cannot be changed, and long-run cost is a situation in which all factors of production can be changed. Cost of production reflects the cost of the resources used in making a product. Main categories of costs include those that are explicitly associated with production (explicit costs) and those that involve alternative uses of resources (implicit costs). Recall “implicit costs” include money that could have been earned in the next best alternative to the current use.

4. Market Structure and Pricing Strategies

The basic price ratio for selling goods is determined under conditions of different markets prevailing in these markets. The selection of a pricing strategy is based on the study of market conditions, product characteristics and the effectiveness of competitive responses. Pricing strategy is a set of general principles and standards that underlie the pricing policy of managerial function of the enterprise. Its development involves the disclosure of a number of problems: formation of price categories, price regulation areas of administered prices, the main methods and techniques available for influencing prices, etc. Pricing strategy includes guidelines and parameter settings for individual products of the organization, as well as a system of differentiated pricing for different market sectors: development and cost price, targeted profit margins for products, method of achieving big expenses, loss, malfunctions, and overhead costs. Prices for products may be differentiated in different regions of the country, in different geographical and climatic conditions, based on customer group conditions. Once the pricing strategy of the company is formulated, split prices for individual products can be defined based on the implemented strategies.

Among the most important influences on a market’s capacity to set prices is the market’s nature. Several different market models are available, but they all share the same basic structure. Over time, the effect of these forces unfolds, and the ups and downs in profit show how successful a business is in managing the “rub” among purposeful actions to raise and maintain its profit margin. Nonetheless, successful business decision making is crucial, sometimes calling for a “delicate cascading from top to bottom.” Managerial economics also fall into the category of the applied research. Its relevance is a key reason for the scholarly attention paid.

5. Managerial Decision-Making and Risk Analysis

The organization relies on the skills of talented employees who possess and can apply the tools for effectively incorporating complex information into timely, profitable corporate decisions. The organization requires a practical, coherent framework for judging opportunities and making decisions. Such a framework is provided by the field of managerial economics. Managerial economics is a discipline that is designed to facilitate decision-making by business managers. In addition, managerial economics is utilized to assure that managers have the right tools for analysis and decision-making. Central to the concepts, theories, and conclusions of managerial economics is the issue of risk. Current and future managers operating in today’s global economic environments, managers face and have always faced both domestic and global competition. Recent high unemployment and a low rate of inflation have been apparent periods of long-range downside risk in the United States, the EU, and other parts of the world. These operating environments, often encompassing economies in which both short-term risk and long-term global risks are present, will have difficult and risky entrepreneurial trade-offs and objectives.

An important goal of managerial economics is to provide a basis on which business decisions can be based. Consumers, labor, and capital are scarce. Managers are trying to allocate these resources in ways that will best benefit an organization. These decisions consider the effect of changes both over time and between companies. Additionally, managers are trying to make choices while faced with uncertainty and the resulting risk. This study is focused on issues involving these decisions or choice-facilitation areas. Real-world examples and case studies are used extensively. In this way, the reader can gain confidence in the decisions that are made and, often, implement the learned tactics by other organizations.