Introduction to managerial economics ppt. ai) Intro managerial childhealthpolicy.vumc.org 2022-10-24
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Managerial economics is the application of economic principles and methods to the analysis of business decisions. It is a branch of economics that deals with the use of economic concepts and tools to make business decisions and understand the impact of those decisions on an organization.
The main goal of managerial economics is to provide decision-makers with the tools and knowledge they need to make informed decisions that will maximize profits and minimize costs. This involves analyzing and interpreting data, conducting market research, and developing and testing hypotheses.
Managerial economics involves a range of topics, including demand analysis, production and cost analysis, market structure, pricing strategies, and resource allocation. It also involves the study of the behavior of firms in different market structures, such as perfect competition, monopolistic competition, oligopoly, and monopoly.
One important aspect of managerial economics is the use of economic models to understand and predict business behavior. Economic models are simplified representations of reality that can help to understand complex economic phenomena and make predictions about future outcomes.
In addition to economic models, managerial economics also relies on statistical techniques and data analysis to understand and interpret data. This includes the use of statistical tools such as regression analysis and hypothesis testing to understand the relationships between different variables and make predictions about future outcomes.
Managerial economics is an important tool for business leaders and managers as it helps them to make informed decisions that will have a positive impact on their organization. It also helps them to understand the economic forces that shape the business environment and how to navigate those forces to achieve their business goals.
In conclusion, managerial economics is a vital tool for business decision-making and understanding the economic forces that shape the business environment. It involves the use of economic models, statistical techniques, and data analysis to make informed decisions that will maximize profits and minimize costs.
Also known as the Gold Fix or London Gold Fixing, this is a meeting of five members of the London Gold Pool that is conducted twice a day by telephone, at 10:30 GMT and 15:00 GMT. Price theory is the other name for micro economic theory. The contents of ME are based mainly on the theory of firm. Price Elasticity of demand Factors affecting Price Elasticity of demandUNIT I Part 2 Elasticity of DemandThe demand function is useful for managers as it identifies the causal variables for and the direction of their effects on the demand for their productsThe manager must know the quantitative relationship between the demand for his product and its determinants for taking certain managerial decisions. In ME, the role of government interference is by means of tax policy, trade policy, industry policy etc. As investors fear lower returns in equities and other investments they minimize risk by purchasing more of a low return, higher price asset that is considered safer Symbol of luxury Consumer's psychology Sale during off-seasonUncertain future Introduction to Managerial EconomicsElasticity of Demand: Definition, Types, Measurement and Significance of Elasticity of Demand. Parkinson defined business economics as a study of the behavior of the firm in theory and practice.
Importance:It helps a decision maker to determine his advertisement outlay and necessary amount to be invested for the advertisement. It is called science since it studies social problems from a scientific point of view. Another common factor influencing rising gold prices is the success of the realestatemarket. According to him, economics is the study of wealth- How wealth is produced and distributed. Economist associated with welfare concept is Alfred Marshall. Pigou, economic welfare is part of social welfare. Preference of the consumer is constant and he is ready to spend for it even if it is expensive.
The demand elasticity is zero when a change in price causes no change in quantity demanded and the demand elasticity is said to be infinity when no reduction in price is needed to cause an increase in demandPrice elasticity of demandImportance of Price ElasticityA knowledge of price elasticity helps to guide a firm whether its sales proceeds, decrease or remain invariable under conditions of price variations. SummaryCapital is the foundation of business. Managerial economics is prescriptive in nature. Exceptions to law of demandGiffen's goodsSymbol of luxuryConsumer's psychologySale during off-seasonUncertain future Giffen's goodsIneconomicsandconsumer theory, aGiffen goodis one which people paradoxically consume more of as the price rises, violating thelaw of demand. Change in weather conditions is also likely to affect the demand for a product. It also helps the firm to estimate the likely demand for its product at different prices Price elasticity of demandIncome elasticity of demandIncome elasticity refers to the quantity demanded to the commodity in response to a given change in income of the consumer. Gold is one of the oldest forms of investments available, but many people do not understand how the price of gold is set.
The development of economics as a growing science can be traced back in the writings of Greek philosophers like Plato and Aristotle. Advertising elasticity is always positive. At one time, the value of gold was based on the gold standard. MacroeconomicsMacroeconomics evaluates the business environment, i. Introduction to Managerial Economics Introduction to Managerial EconomicsDefinition, Nature and Scope of Managerial EconomicsDemand Analysis: Demand Determinants, Law of Demand and its exceptionsUNIT I Part 1 DefinitionsManagerial economics is an offshoot of two disciplines economics and managementAdam Smith economics is the subject which studies as to, how the wealth is produced and consumed as the wealth is the main objective and purpose of every human activityHe considered economics as the study of nature and uses of national wealth DefinitionsDr Alfred Marshall Economics is a study of mans actions in the ordinary business of life: it enquires how he gets his income and how he uses itHe says, the main aim of economics is to promote Human Welfare and not wealth Promote Human Welfare than wealth DefinitionsA C Pigou The study of economic welfare that can be brought directly or indirectly, into relationship with the measuring rod of moneyProf.
A change in government policies will influence demand for the product hence this law assumes a constant government policy. Unfortunately, gold is rather unique in that most of the gold ever mined is still in existence and could thus enter the market at any time. It also helps us to know whether a commodity is a superior good, normal or an inferior good Having Less Income Having More IncomeWhen a person has less income he tends to buy commodities that he can constitute within his limits but whereas if income is more the same person tries to spend more lavishly, which increases the demand. Managerial economics is also known as economics of firm. When there are low or negative returns on real estate, the demand for gold and other commodities typically is expected to increase. Scarcity of Definition is given by Prof Lionel Robbins. Marshall gave primary importance to man and secondary importance to wealth.
Income elasticity of demand. EconomicsDiscussionsEconomics is mainly concerned with the description and analysis of economic problems faced by individuals, organizations, nations and the worldEconomics aims at giving a solution to this problem by teaching us how to 'minimize' the use of resources and or how to 'maximize' the level of outputManagement of an organization uses the tools and techniques from economics to find out the correct solution to the problem in its organization 'minimize' the use of resources and or 'maximize' the level of outputNature and Scope of Managerial Economics MICROECONOMICSThis is also known as Price Theory or Theory of Firm MicroeconomicsThe study of individual consumer or a firm is called microeconomicsIt deals with behavior and problems of single individual and of organization. Lionel Robbins The science, which studies human behavior as a relationship between ends and scarce means which have alternative usesLord Keynes The study of administration of scarce means and the determinants of employments and income6DiscussionsEconomics is defined on the basis of four major conceptsWealth concept Welfare concept Scarcity concept and Growth concept. Management is an art of getting things done through people formally organized groupsFor any queries contact me at. The two major concepts of managerial economics are decision-making and forward Planning. Advertising makes people aware of the product or service, which subsequently increases the demandFactors Governing Elasticity of DemandNature of the productTastes and preferences of the consumerTime periodLevel of priceGovernment policyImportance of elasticity of demandIt helps: a to fix the prices of factors of production, b to fix the prices of goods or services, c to formulate government policies, d to forecast demand, and e to plan the level of output and price Why Does the Price of Gold Rise and Fall? Price elasticity of demand. Bank failures, although somewhat uncommon today, can also contribute to an increase in the price of gold.
The best example of this occurred during theGreat Depression, when rising gold prices due to bank failures led President Roosevelt to ban the holding of gold by private citizens. You can see that in the dressing here, just an exampleIncome elasticity of demandCross elasticity of demandIt refers to the quantity demanded for a commodity in response to a change in the price of a related good, which may be a substitute or a complement Importance of cross elasticity :It is useful in measuring the inter dependence of demand for a commodity and the prices of its related commodities. Cross elasticity of demand. As with most other forms of investments, the price of gold is greatly influenced by supply and demand. Managerial economics is applied microeconomics to business.
According to him wealth is simply a means to an end in all activities, the end being human welfare. The objective of demand analysis is to know consumer behavior. Prof Amartya Sen won the Nobel prize for economics in 1998. Managerial economics is considered as a part of normative economics. Management is a function of following areas of POSDCORB. It helps to estimate the likely effect on its sales of pricing decisions, its competitors and helpers Substitutes ComplementFor coffee tea is a substitute similarly sugar is a complementFor a pencil eraser is complementary goodAnd for shoes its shoe polish60Advertising elasticity of demandIt refers to the measurement of proportionate change in demand in response to the proportionate change in promotional efforts.
It provides various concepts for the determination of prices of commodities, services and factors of production. People start to fear that their paper currency may no longer hold value, but they see gold as a stable asset that can always be used to purchase food and other necessities. However, the Gold Fixing is widely recognized as the benchmark used to price gold and gold products throughout the world. Why Does the Price of Gold Rise and Fall? He defined economics as the study of the nature and cause of national wealth. This leads to the concept of 'elasticity of demand'Elasticity is measure of percentage of change in quantity demanded to percentage change in priceMeasurement of elasticityPerfectly Elastic DemandPerfectly Inelastic DemandRelatively Elastic DemandRelatively Inelastic DemandUnity Elasticity Relative ElasticityTypes of ElasticityThere are four important kinds of elasticity namely:1. No change in size, composition and sex ratio of population.
SummaryAdam Smith, the father of modern economics told that economics is the study of wealth. Therefore this law assumes a stable weather condition. The demand for fast food arises as it offers; variety, easily available, big store area so that people can sit and talk. Officially, the purpose of the Gold Fixing is to settle contracts between members of the London bullion market. . James Bates and J.