Author: admin
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Market Structure & Pricing Decisions
Price determination is one of the most crucial aspects in economics. Business managers are expected to make perfect decisions based on their knowledge and judgment. Since every economic activity in the market is measured as per price, it is important to know the concepts and theories related to pricing. Pricing discusses the rationale and assumptions…
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Cost & Breakeven Analysis
In managerial economics another area which is of great importance is cost of production. The cost which a firm incurs in the process of production of its goods and services is an important variable for decision making. Total cost together with total revenue determines the profit level of a business. In order to maximize profits…
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Theory of Production
In economics, production theory explains the principles in which the business has to take decisions on how much of each commodity it sells and how much it produces and also how much of raw material ie., fixed capital and labor it employs and how much it will use. It defines the relationships between the prices…
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Demand Forecasting
Demand Demand is a widely used term, and in common is considered synonymous with terms like ‘want’ or ‘desire’. In economics, demand has a definite meaning which is different from ordinary use. In this chapter, we will explain what demand from the consumer’s point of view is and analyze demand from the firm perspective. Demand…
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Demand & Elasticities
The ‘Law Of Demand’ states that, all other factors being equal, as the price of a good or service increases, consumer demand for the good or service will decrease, and vice versa. Demand elasticity is a measure of how much the quantity demanded will change if another factor changes. Changes in Demand Change in demand…
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Market System & Equilibrium
The Economic Systems Economic market system is a set of institutions for allocating resources and making choices to satisfy human wants. In a market system, the forces and interaction of supply and demand for each commodity determines what and how much to produce. In price system, the combination is based on least combination method. This…
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Regression Techniques
Regression is a statistical technique that helps in qualifying the relationship between the interrelated economic variables. The first step involves estimating the coefficient of the independent variable and then measuring the reliability of the estimated coefficient. This requires formulating a hypothesis, and based on the hypothesis, we can create a function. If a manager wants…
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Economic Analysis & Optimizations
Economic analysis is the most crucial phase in managerial economics. A manager has to collect and study the economic data of the environment in which a firm operates. He has to conduct a detailed statistical analysis in order to do research on industrial markets. The research may comprise of information regarding tax rates, products, competitor’s…
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Business Firms & Decisions
Business firms are a combination of manpower, financial, and physical resources which help in making managerial decisions. Societies can be classified into two main categories − production and consumption. Firms are the economic entities and are on the production side, whereas consumers are on the consumption side. The performances of firms get analyzed in the…
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Managerial Economics Overview
A close interrelationship between management and economics had led to the development of managerial economics. Economic analysis is required for various concepts such as demand, profit, cost, and competition. In this way, managerial economics is considered as economics applied to “problems of choice’’ or alternatives and allocation of scarce resources by the firms. Managerial economics…