Managerial Economics Flashcards
Managerial Economics Definition
Science to explain how resources can be allocated in an efficient manner
Science to explain how resources can be allocated in an efficient manner
Managerial Economics Definition
Elements of Economic Decision
- ) Define decision to be made
- ) Outline Available choices
- ) Define a measurable objective
- ) Input Variables in respect
- ) Relationships between variables interpret.
- ) Define decision to be made
- ) Outline Available choices
- ) Define a measurable objective
- ) Input Variables in respect
- ) Relationships between variables interpret.
Elements of Economic Decision
Price Elasticity
change of demand due to a change of price
change of demand due to a change of price
Price Elasticity
elastic demand
lose customers after price increases
lose customers after price increases
elastic demand
inelastic demand
customers remain loyal after a price increases
customers remain loyal after a price increases
inelastic demand
Shift OF demand curve
change of volume sold even if price does not change
change of volume sold even if price does not change
Shift OF demand curve
Shift ON demand curve
change of volume sold due to change of price
change of volume sold due to change of price
Shift ON demand curve
Law of Diminishing Return
every additional unit of input generates less return from previous unit
every additional unit of input generates less return from previous unit
Law of Diminishing Return
Economies of Scale
The more you produce (scale) the lower the average cost per product
The more you produce (scale) the lower the average cost per product
Economies of Scale
Profit Maximization
Analysis of demand curve and variable costs and optimizing to set price
Analysis of demand curve and variable costs and optimizing to set price
Profit Maximization
Price Discrimination
willing to pay more or less in discretion of the buyer
willing to pay more or less in discretion of the buyer
Price Discrimination
Game Theory
The moves and countermoves between two parties who try to optimize their own results
The moves and countermoves between two parties who try to optimize their own results
Game Theory
