Samenvatting Managerial Economics
chapter 1. introduction to managerial economics
1. what is managerial economics?
Managerial economics = the science of directing scarce resources to manage effectively → each needs to understand how they can influence the demand through price and advertising, what is the best organizational architecture and how to compete
Differences between ‘new’ and ‘old’ economy * Network effects in demand = the benefit provided to any user depends on the total number of other users * Scalability = the degree to which the scale and scope of business can be increased without a corresponding increase in costs → Public good = one person’s consumption does not reduce the quantity available to others
Branches Managerial economics: * Competitive markets * Market power * Imperfect markets
2. preliminaries scope (omvang)
Microeconomics
= the study of individual economic behavior where resources are costly → how consumers respond to changes in prices and income, …
Managerial economics more limited scope = it is the application of microeconomics to managerial issues
Macroeconomics
= focuses on aggregate economic variables = considers economic aggregates directly rather than as the aggregation of individual consumers and businesses
methodology
Fundamental premise = individuals share common motivations that lead them to behave systematically in making economic choices → a person who faces the same choices at two different times will behave in the same way at both times → it is systematic so it can be studied
Economic model = a concise description of behavior and outcomes = abstraction
Models are constructed by inductive
1. what is managerial economics?
Managerial economics = the science of directing scarce resources to manage effectively → each needs to understand how they can influence the demand through price and advertising, what is the best organizational architecture and how to compete
Differences between ‘new’ and ‘old’ economy * Network effects in demand = the benefit provided to any user depends on the total number of other users * Scalability = the degree to which the scale and scope of business can be increased without a corresponding increase in costs → Public good = one person’s consumption does not reduce the quantity available to others
Branches Managerial economics: * Competitive markets * Market power * Imperfect markets
2. preliminaries scope (omvang)
Microeconomics
= the study of individual economic behavior where resources are costly → how consumers respond to changes in prices and income, …
Managerial economics more limited scope = it is the application of microeconomics to managerial issues
Macroeconomics
= focuses on aggregate economic variables = considers economic aggregates directly rather than as the aggregation of individual consumers and businesses
methodology
Fundamental premise = individuals share common motivations that lead them to behave systematically in making economic choices → a person who faces the same choices at two different times will behave in the same way at both times → it is systematic so it can be studied
Economic model = a concise description of behavior and outcomes = abstraction
Models are constructed by inductive