Week 1 e-Activity
Use the Internet or the Strayer Library to research the tools related to the managerial economics. Answer the question: What managerial economic decisions are business leaders making? Be prepared to discuss.
Discussion Question 1
"Managerial Economic Decision Making" Please respond to the following:
From the e-Activity, assess how business leaders use managerial economics to make business decisions indicating how profits may be impacted.
Learning the concepts of managerial economics is a valuable tool for making economic decisions. Managerial economics applies quantitative techniques to business decisions using economic concepts such as supply and demand, price elasticity and marginal analysis. There are a number of issues relevant to businesses that are based on economic thinking or analysis. Managerial economics can answer the following questions: When is the best time to make capital investments? What is a good way to determine whether a company's stock is a good investment? Should my company enter a new market with a new invention?
Other questions that managerial economics attempts to answer are: What determines whether an aspiring business firm should enter a particular industry or simply start producing a new product or service? Should a firm continue to be in business in an industry in which it is currently engaged or cut its losses and exit the industry? Why do some professions pay handsome salaries, whereas some others pay barely enough to survive? How can the business best motivate the employees of a firm?
The issues relevant to managerial economics can be further focused by expanding on the first two of the preceding questions. Consider the first question in which a firm (or a would-be firm) is considering entering an industry. In order to answer pertinent questions, managerial economics applies economic theories, tools, and techniques to administrative and business decision-making. The first step in the...