The Concepts of the Science of Managerial Economics
Consider the Concepts of the Science of Managerial Economics
Running successful businesses requires involvement of well experienced and talented managers; all companies’ stakeholders concern, in running companies, is to make profits and expectation is on managers’ part to make such desire become the fact of reality. One of the tools managers use to analyse company’s performances and be able to make intelligent decisions- for further profitability and sustainability of the corporations- is by economical tool. “managerial economics provides a systematic, logical way of analyzing business decisions that focuses on the economic forces that shape both day-to-day decisions and long-run planning decisions” (Thomas, & Maurice, 2011, p. 30).
As stated by Thomas, & Maurice, managerial economics is the result of two fundamental “areas of economic theory”, namely microeconomics and industrial organization (2011, p. 5). “Microeconomics is the study and analysis of the behavior of individual segments of the economy: individual consumers, workers and owners of resources, individual firms, indus- tries, and markets for goods and services.” (Thomas, & Maurice, 2011, p. 6). Hence, in microeconomics we are dealing wih essesntially every goods and services bought and sold I the market; hence an important feature of microecomnomics is the supply and demand function of the market. As the level of supply and demand changes, organizations take strategical approaches toward atteibutes of their quality, quantity supplies, and the prices. At the microeconomic level, any changes in national governmental policies, such as flucuatinon of interest rates, and taxation policies. By studying and understanding the forces affecting microeconomics, companies are able to make realistic decisions in taking adequate approaches toward the market in terms of quality/quantity supplies, pricing, and dealing with competition. The study of microeconomics includes areas such as production, cost control,
Running successful businesses requires involvement of well experienced and talented managers; all companies’ stakeholders concern, in running companies, is to make profits and expectation is on managers’ part to make such desire become the fact of reality. One of the tools managers use to analyse company’s performances and be able to make intelligent decisions- for further profitability and sustainability of the corporations- is by economical tool. “managerial economics provides a systematic, logical way of analyzing business decisions that focuses on the economic forces that shape both day-to-day decisions and long-run planning decisions” (Thomas, & Maurice, 2011, p. 30).
As stated by Thomas, & Maurice, managerial economics is the result of two fundamental “areas of economic theory”, namely microeconomics and industrial organization (2011, p. 5). “Microeconomics is the study and analysis of the behavior of individual segments of the economy: individual consumers, workers and owners of resources, individual firms, indus- tries, and markets for goods and services.” (Thomas, & Maurice, 2011, p. 6). Hence, in microeconomics we are dealing wih essesntially every goods and services bought and sold I the market; hence an important feature of microecomnomics is the supply and demand function of the market. As the level of supply and demand changes, organizations take strategical approaches toward atteibutes of their quality, quantity supplies, and the prices. At the microeconomic level, any changes in national governmental policies, such as flucuatinon of interest rates, and taxation policies. By studying and understanding the forces affecting microeconomics, companies are able to make realistic decisions in taking adequate approaches toward the market in terms of quality/quantity supplies, pricing, and dealing with competition. The study of microeconomics includes areas such as production, cost control,