SlideShare una empresa de Scribd logo
1 de 12
Nature and Scope of
Managerial Economics
Chapter 1
               OVERVIEW
   How Is Managerial Economics Useful?
   Theory of the Firm
   Profit Measurement
   Why Do Profits Vary among Firms?
   Role of Business in Society
   Structure of this Text
Chapter 1
                KEY CONCEPTS
   managerial economics    economic profit
   theory of the firm      profit margin
   expected value          return on stockholders'
    maximization            equity
   value of the firm       frictional profit theory
   present value           monopoly profit theory
   optimize                innovation profit theory
   satisfice               compensatory profit theory
   business profit
   normal rate of return
How Is Managerial Economics
            Useful?
 Evaluating Choice Alternatives
   Identify ways to efficiently achieve goals.
   Specify pricing and production strategies.
   Provide production and marketing rules to help
    maximize net profits.
 Making the Best Decision
   Managerial economics can be used to efficiently
    meet management objectives.
   Managerial economics can be used to understand
    logic of company, consumer, and government
    decisions.
Theory of the Firm
 Expected Value Maximization
   Owner-managers maximize short-run profits.
   Primary goal is long-term expected value maximization.
 Constraints and the Theory of the Firm
   Resource constraints.
   Social constraints
 Limitations of the Theory of the Firm
   Alternative theory adds perspective.
   Competition forces efficiency.
   Hostile takeovers threaten inefficient managers.
Profit Measurement
 Business Versus Economic Profit
   Business (accounting) profit reflects
    explicit costs and revenues.
   Economic profit.
     Profit above a risk-adjusted normal return.
     Considers cash and noncash items.
 Variability of Business Profits
   Business profits vary widely.
Why Do Profits Vary
      Among Firms?
 Disequilibrium Profit Theories
   Rapid growth in revenues.
   Rapid decline in costs.
 Compensatory Profit Theories
   Better, faster, or cheaper than the
    competition is profitable.
Role of Business in
           Society
 Why Firms Exist
   Business is useful in satisfying consumer
    wants.
   Business contributes to social welfare
 Social Responsibility of Business
   Serve customers.
   Provide employment opportunities.
   Obey laws and regulations.
Structure of this Text
 Objectives
   Understand usefulness of economics in
    describing managerial behavior.
   Understand how economics can be
    used to improve managerial decisions.
   Appreciate vital role of business in
    society.

Más contenido relacionado

La actualidad más candente

Scope of managerial economics
Scope of managerial economicsScope of managerial economics
Scope of managerial economics
Nethan P
 
An overview of behavioral finance
An overview of behavioral financeAn overview of behavioral finance
An overview of behavioral finance
Arthur MEUNIER ~ 亚瑟
 
Intro. to business economics
Intro. to business economicsIntro. to business economics
Intro. to business economics
Vikash Rathour
 

La actualidad más candente (20)

Says law
Says lawSays law
Says law
 
Role and responsibilities of managerial economist
Role and responsibilities of managerial economist Role and responsibilities of managerial economist
Role and responsibilities of managerial economist
 
Managerial Economic notes 1st sem mba
 Managerial Economic notes 1st sem mba  Managerial Economic notes 1st sem mba
Managerial Economic notes 1st sem mba
 
Capital structure theories 1
Capital structure theories  1Capital structure theories  1
Capital structure theories 1
 
objectives of a firm
objectives of a firmobjectives of a firm
objectives of a firm
 
Capital structure
Capital structureCapital structure
Capital structure
 
Fundamental concepts, principle of economics
Fundamental concepts, principle of economicsFundamental concepts, principle of economics
Fundamental concepts, principle of economics
 
Security Analysis And Portfolio Managment
Security Analysis And Portfolio ManagmentSecurity Analysis And Portfolio Managment
Security Analysis And Portfolio Managment
 
Theory of employment
Theory of employmentTheory of employment
Theory of employment
 
Nature and scope of managerial economics
Nature and scope of managerial economicsNature and scope of managerial economics
Nature and scope of managerial economics
 
BEHAVIOURAL FINANCE
BEHAVIOURAL FINANCEBEHAVIOURAL FINANCE
BEHAVIOURAL FINANCE
 
Principles of managerial economics
Principles of managerial economicsPrinciples of managerial economics
Principles of managerial economics
 
Capital structure ppt
Capital structure pptCapital structure ppt
Capital structure ppt
 
Theory of Profit
Theory of ProfitTheory of Profit
Theory of Profit
 
Scope of managerial economics
Scope of managerial economicsScope of managerial economics
Scope of managerial economics
 
Scope of Business Economics
Scope of Business EconomicsScope of Business Economics
Scope of Business Economics
 
Ch. 1 micro and macro economics
Ch. 1 micro and macro economicsCh. 1 micro and macro economics
Ch. 1 micro and macro economics
 
An overview of behavioral finance
An overview of behavioral financeAn overview of behavioral finance
An overview of behavioral finance
 
Expected utility theory
Expected utility theoryExpected utility theory
Expected utility theory
 
Intro. to business economics
Intro. to business economicsIntro. to business economics
Intro. to business economics
 

Destacado

nature scope significance of Managerial Economics
nature scope significance of Managerial Economicsnature scope significance of Managerial Economics
nature scope significance of Managerial Economics
Aditya Roy
 
Nature and scope of managerial economics
Nature and scope of managerial economicsNature and scope of managerial economics
Nature and scope of managerial economics
Harinadh Karimikonda
 
Managerial economics
Managerial economicsManagerial economics
Managerial economics
Chandan Gpta
 
Fundamental economic concepts
Fundamental economic conceptsFundamental economic concepts
Fundamental economic concepts
jschol31
 
Managerial economics
Managerial economicsManagerial economics
Managerial economics
suvarnapstpl
 

Destacado (17)

nature scope significance of Managerial Economics
nature scope significance of Managerial Economicsnature scope significance of Managerial Economics
nature scope significance of Managerial Economics
 
Nature and scope of managerial economics
Nature and scope of managerial economicsNature and scope of managerial economics
Nature and scope of managerial economics
 
Managerial Economics: Meaning, scope and methods of Managerial Economics
Managerial Economics: Meaning, scope and methods of Managerial Economics  Managerial Economics: Meaning, scope and methods of Managerial Economics
Managerial Economics: Meaning, scope and methods of Managerial Economics
 
Unethical Business by Cocacola
Unethical Business by CocacolaUnethical Business by Cocacola
Unethical Business by Cocacola
 
Managerial eco
Managerial ecoManagerial eco
Managerial eco
 
Managerial economics
Managerial economicsManagerial economics
Managerial economics
 
Fundamental economic concepts
Fundamental economic conceptsFundamental economic concepts
Fundamental economic concepts
 
DECISION MAKING IN MANAGERIAL ECONOMICS
DECISION MAKING IN  MANAGERIAL ECONOMICSDECISION MAKING IN  MANAGERIAL ECONOMICS
DECISION MAKING IN MANAGERIAL ECONOMICS
 
Presentation1
Presentation1Presentation1
Presentation1
 
Intro
IntroIntro
Intro
 
Managerial decision making - ENGINEERING ECONOMICS & FINANCIAL ACCOUNTING - ...
Managerial decision making -  ENGINEERING ECONOMICS & FINANCIAL ACCOUNTING - ...Managerial decision making -  ENGINEERING ECONOMICS & FINANCIAL ACCOUNTING - ...
Managerial decision making - ENGINEERING ECONOMICS & FINANCIAL ACCOUNTING - ...
 
Economics for managerial_decision_making
Economics for managerial_decision_makingEconomics for managerial_decision_making
Economics for managerial_decision_making
 
Managerial economics
Managerial economicsManagerial economics
Managerial economics
 
Ppt of introduction_to_me
Ppt of introduction_to_mePpt of introduction_to_me
Ppt of introduction_to_me
 
Managerial economics ppt baba @ mba 2009
Managerial economics ppt baba  @ mba 2009Managerial economics ppt baba  @ mba 2009
Managerial economics ppt baba @ mba 2009
 
Introduction to managerial economics
Introduction to managerial economicsIntroduction to managerial economics
Introduction to managerial economics
 
Economics 1.216181522
Economics 1.216181522Economics 1.216181522
Economics 1.216181522
 

Similar a Nature and scope of managerial economics ppt @ mba 2009

102 eabd solved sspu qp april2018
102 eabd solved sspu qp april2018102 eabd solved sspu qp april2018
102 eabd solved sspu qp april2018
ASM's IBMR- Chinchwad
 
Business economics chapter 2
Business economics chapter 2Business economics chapter 2
Business economics chapter 2
MidoTami
 

Similar a Nature and scope of managerial economics ppt @ mba 2009 (20)

Managerial economics overwiveppt @ bec doms
Managerial economics overwiveppt @ bec domsManagerial economics overwiveppt @ bec doms
Managerial economics overwiveppt @ bec doms
 
Me11 -ch. 1
Me11 -ch. 1Me11 -ch. 1
Me11 -ch. 1
 
econ 415 chapter 1.ppt
econ 415 chapter 1.pptecon 415 chapter 1.ppt
econ 415 chapter 1.ppt
 
102 eabd solved sspu qp april2018
102 eabd solved sspu qp april2018102 eabd solved sspu qp april2018
102 eabd solved sspu qp april2018
 
INTRODUCTION-TO-MANAGERIAL-ECONOMICS.pptx
INTRODUCTION-TO-MANAGERIAL-ECONOMICS.pptxINTRODUCTION-TO-MANAGERIAL-ECONOMICS.pptx
INTRODUCTION-TO-MANAGERIAL-ECONOMICS.pptx
 
Notes_on_Managerial_Economics.pdf
Notes_on_Managerial_Economics.pdfNotes_on_Managerial_Economics.pdf
Notes_on_Managerial_Economics.pdf
 
Managerial economics
Managerial economicsManagerial economics
Managerial economics
 
Business economics
Business economicsBusiness economics
Business economics
 
Bba 103
Bba 103Bba 103
Bba 103
 
Business economics
Business economicsBusiness economics
Business economics
 
Business economics chapter 2
Business economics chapter 2Business economics chapter 2
Business economics chapter 2
 
Economics
EconomicsEconomics
Economics
 
M.e
M.eM.e
M.e
 
MANAGERIAL_ECONOMICS_PPT_at_MBA_2009 (1).ppt
MANAGERIAL_ECONOMICS_PPT_at_MBA_2009 (1).pptMANAGERIAL_ECONOMICS_PPT_at_MBA_2009 (1).ppt
MANAGERIAL_ECONOMICS_PPT_at_MBA_2009 (1).ppt
 
MANAGERIAL_ECONOMICS_PPT_at_MBA_2009.ppt
MANAGERIAL_ECONOMICS_PPT_at_MBA_2009.pptMANAGERIAL_ECONOMICS_PPT_at_MBA_2009.ppt
MANAGERIAL_ECONOMICS_PPT_at_MBA_2009.ppt
 
MANAGERIAL_ECONOMICS_PPT_at_MBA_2009 (2).ppt
MANAGERIAL_ECONOMICS_PPT_at_MBA_2009 (2).pptMANAGERIAL_ECONOMICS_PPT_at_MBA_2009 (2).ppt
MANAGERIAL_ECONOMICS_PPT_at_MBA_2009 (2).ppt
 
Behavioral Theory of Firm
Behavioral Theory of FirmBehavioral Theory of Firm
Behavioral Theory of Firm
 
Managerial economics book @ bec doms bagalkot mba
Managerial economics book @ bec doms bagalkot mba Managerial economics book @ bec doms bagalkot mba
Managerial economics book @ bec doms bagalkot mba
 
Chap01
Chap01Chap01
Chap01
 
Managerial_Economics_Module_1_Introducti.doc
Managerial_Economics_Module_1_Introducti.docManagerial_Economics_Module_1_Introducti.doc
Managerial_Economics_Module_1_Introducti.doc
 

Más de Babasab Patil

Marketing management module 2 marketing environment mba 1st sem by babasab pa...
Marketing management module 2 marketing environment mba 1st sem by babasab pa...Marketing management module 2 marketing environment mba 1st sem by babasab pa...
Marketing management module 2 marketing environment mba 1st sem by babasab pa...
Babasab Patil
 
Marketing management module 4 measuring andforecasting demand mba 1st sem by...
Marketing management module 4  measuring andforecasting demand mba 1st sem by...Marketing management module 4  measuring andforecasting demand mba 1st sem by...
Marketing management module 4 measuring andforecasting demand mba 1st sem by...
Babasab Patil
 
Measuring and forecasting demand module 4 mba 1st sem by babasab patil (karri...
Measuring and forecasting demand module 4 mba 1st sem by babasab patil (karri...Measuring and forecasting demand module 4 mba 1st sem by babasab patil (karri...
Measuring and forecasting demand module 4 mba 1st sem by babasab patil (karri...
Babasab Patil
 
Notes managerial communication 3 business correspondence and report writing ...
Notes managerial communication  3 business correspondence and report writing ...Notes managerial communication  3 business correspondence and report writing ...
Notes managerial communication 3 business correspondence and report writing ...
Babasab Patil
 
Notes managerial communication mod 2 basic communication skills mba 1st sem ...
Notes managerial communication mod 2  basic communication skills mba 1st sem ...Notes managerial communication mod 2  basic communication skills mba 1st sem ...
Notes managerial communication mod 2 basic communication skills mba 1st sem ...
Babasab Patil
 
Notes managerial communication mod 4 the job application process mba 1st sem ...
Notes managerial communication mod 4 the job application process mba 1st sem ...Notes managerial communication mod 4 the job application process mba 1st sem ...
Notes managerial communication mod 4 the job application process mba 1st sem ...
Babasab Patil
 
Notes managerial communication mod 5 interviews mba 1st sem by babasab patil...
Notes managerial communication mod 5 interviews  mba 1st sem by babasab patil...Notes managerial communication mod 5 interviews  mba 1st sem by babasab patil...
Notes managerial communication mod 5 interviews mba 1st sem by babasab patil...
Babasab Patil
 
Notes managerial communication part 1 mba 1st sem by babasab patil (karrisatte)
Notes managerial communication part 1  mba 1st sem by babasab patil (karrisatte)Notes managerial communication part 1  mba 1st sem by babasab patil (karrisatte)
Notes managerial communication part 1 mba 1st sem by babasab patil (karrisatte)
Babasab Patil
 
Principles of marketing mba 1st sem by babasab patil (karrisatte)
Principles of marketing mba 1st sem by babasab patil (karrisatte)Principles of marketing mba 1st sem by babasab patil (karrisatte)
Principles of marketing mba 1st sem by babasab patil (karrisatte)
Babasab Patil
 
Marketing management module 1 important questions of marketing mba 1st sem...
Marketing management module 1  important questions of marketing   mba 1st sem...Marketing management module 1  important questions of marketing   mba 1st sem...
Marketing management module 1 important questions of marketing mba 1st sem...
Babasab Patil
 

Más de Babasab Patil (20)

Segmentation module 4 mba 1st sem by babasab patil (karrisatte)
Segmentation module 4  mba 1st sem by babasab patil (karrisatte)Segmentation module 4  mba 1st sem by babasab patil (karrisatte)
Segmentation module 4 mba 1st sem by babasab patil (karrisatte)
 
Marketing management module 1 core concepts of marketing mba 1st sem by baba...
Marketing management module 1 core concepts of marketing  mba 1st sem by baba...Marketing management module 1 core concepts of marketing  mba 1st sem by baba...
Marketing management module 1 core concepts of marketing mba 1st sem by baba...
 
Marketing management module 2 marketing environment mba 1st sem by babasab pa...
Marketing management module 2 marketing environment mba 1st sem by babasab pa...Marketing management module 2 marketing environment mba 1st sem by babasab pa...
Marketing management module 2 marketing environment mba 1st sem by babasab pa...
 
Marketing management module 4 measuring andforecasting demand mba 1st sem by...
Marketing management module 4  measuring andforecasting demand mba 1st sem by...Marketing management module 4  measuring andforecasting demand mba 1st sem by...
Marketing management module 4 measuring andforecasting demand mba 1st sem by...
 
Measuring and forecasting demand module 4 mba 1st sem by babasab patil (karri...
Measuring and forecasting demand module 4 mba 1st sem by babasab patil (karri...Measuring and forecasting demand module 4 mba 1st sem by babasab patil (karri...
Measuring and forecasting demand module 4 mba 1st sem by babasab patil (karri...
 
Notes managerial communication 3 business correspondence and report writing ...
Notes managerial communication  3 business correspondence and report writing ...Notes managerial communication  3 business correspondence and report writing ...
Notes managerial communication 3 business correspondence and report writing ...
 
Notes managerial communication mod 2 basic communication skills mba 1st sem ...
Notes managerial communication mod 2  basic communication skills mba 1st sem ...Notes managerial communication mod 2  basic communication skills mba 1st sem ...
Notes managerial communication mod 2 basic communication skills mba 1st sem ...
 
Notes managerial communication mod 4 the job application process mba 1st sem ...
Notes managerial communication mod 4 the job application process mba 1st sem ...Notes managerial communication mod 4 the job application process mba 1st sem ...
Notes managerial communication mod 4 the job application process mba 1st sem ...
 
Notes managerial communication mod 5 interviews mba 1st sem by babasab patil...
Notes managerial communication mod 5 interviews  mba 1st sem by babasab patil...Notes managerial communication mod 5 interviews  mba 1st sem by babasab patil...
Notes managerial communication mod 5 interviews mba 1st sem by babasab patil...
 
Notes managerial communication part 1 mba 1st sem by babasab patil (karrisatte)
Notes managerial communication part 1  mba 1st sem by babasab patil (karrisatte)Notes managerial communication part 1  mba 1st sem by babasab patil (karrisatte)
Notes managerial communication part 1 mba 1st sem by babasab patil (karrisatte)
 
Principles of marketing mba 1st sem by babasab patil (karrisatte)
Principles of marketing mba 1st sem by babasab patil (karrisatte)Principles of marketing mba 1st sem by babasab patil (karrisatte)
Principles of marketing mba 1st sem by babasab patil (karrisatte)
 
Segmentation module 4 mba 1st sem by babasab patil (karrisatte)
Segmentation module 4  mba 1st sem by babasab patil (karrisatte)Segmentation module 4  mba 1st sem by babasab patil (karrisatte)
Segmentation module 4 mba 1st sem by babasab patil (karrisatte)
 
Marketing management module 1 important questions of marketing mba 1st sem...
Marketing management module 1  important questions of marketing   mba 1st sem...Marketing management module 1  important questions of marketing   mba 1st sem...
Marketing management module 1 important questions of marketing mba 1st sem...
 
Discovery shuttle processing NASA before launching the rocket by babasab ...
Discovery shuttle processing  NASA   before  launching the rocket by babasab ...Discovery shuttle processing  NASA   before  launching the rocket by babasab ...
Discovery shuttle processing NASA before launching the rocket by babasab ...
 
Corporate lessons from__iim__calcutta by babasab patil
Corporate lessons from__iim__calcutta by babasab patil Corporate lessons from__iim__calcutta by babasab patil
Corporate lessons from__iim__calcutta by babasab patil
 
Communication problems between men and women by babasab patil
Communication problems between men and women by babasab patil Communication problems between men and women by babasab patil
Communication problems between men and women by babasab patil
 
Brasil waterfall byy babasab patil
Brasil waterfall  byy babasab patil Brasil waterfall  byy babasab patil
Brasil waterfall byy babasab patil
 
Best aviation photography_ever__bar_none by babasab patil
Best aviation photography_ever__bar_none by babasab patil Best aviation photography_ever__bar_none by babasab patil
Best aviation photography_ever__bar_none by babasab patil
 
Attitude stone cutter
Attitude stone cutterAttitude stone cutter
Attitude stone cutter
 
Attitude stone cutter
Attitude stone cutterAttitude stone cutter
Attitude stone cutter
 

Último

+971581248768>> SAFE AND ORIGINAL ABORTION PILLS FOR SALE IN DUBAI AND ABUDHA...
+971581248768>> SAFE AND ORIGINAL ABORTION PILLS FOR SALE IN DUBAI AND ABUDHA...+971581248768>> SAFE AND ORIGINAL ABORTION PILLS FOR SALE IN DUBAI AND ABUDHA...
+971581248768>> SAFE AND ORIGINAL ABORTION PILLS FOR SALE IN DUBAI AND ABUDHA...
?#DUbAI#??##{{(☎️+971_581248768%)**%*]'#abortion pills for sale in dubai@
 
Cloud Frontiers: A Deep Dive into Serverless Spatial Data and FME
Cloud Frontiers:  A Deep Dive into Serverless Spatial Data and FMECloud Frontiers:  A Deep Dive into Serverless Spatial Data and FME
Cloud Frontiers: A Deep Dive into Serverless Spatial Data and FME
Safe Software
 
Why Teams call analytics are critical to your entire business
Why Teams call analytics are critical to your entire businessWhy Teams call analytics are critical to your entire business
Why Teams call analytics are critical to your entire business
panagenda
 

Último (20)

Apidays New York 2024 - The Good, the Bad and the Governed by David O'Neill, ...
Apidays New York 2024 - The Good, the Bad and the Governed by David O'Neill, ...Apidays New York 2024 - The Good, the Bad and the Governed by David O'Neill, ...
Apidays New York 2024 - The Good, the Bad and the Governed by David O'Neill, ...
 
Web Form Automation for Bonterra Impact Management (fka Social Solutions Apri...
Web Form Automation for Bonterra Impact Management (fka Social Solutions Apri...Web Form Automation for Bonterra Impact Management (fka Social Solutions Apri...
Web Form Automation for Bonterra Impact Management (fka Social Solutions Apri...
 
MS Copilot expands with MS Graph connectors
MS Copilot expands with MS Graph connectorsMS Copilot expands with MS Graph connectors
MS Copilot expands with MS Graph connectors
 
Apidays Singapore 2024 - Scalable LLM APIs for AI and Generative AI Applicati...
Apidays Singapore 2024 - Scalable LLM APIs for AI and Generative AI Applicati...Apidays Singapore 2024 - Scalable LLM APIs for AI and Generative AI Applicati...
Apidays Singapore 2024 - Scalable LLM APIs for AI and Generative AI Applicati...
 
Data Cloud, More than a CDP by Matt Robison
Data Cloud, More than a CDP by Matt RobisonData Cloud, More than a CDP by Matt Robison
Data Cloud, More than a CDP by Matt Robison
 
+971581248768>> SAFE AND ORIGINAL ABORTION PILLS FOR SALE IN DUBAI AND ABUDHA...
+971581248768>> SAFE AND ORIGINAL ABORTION PILLS FOR SALE IN DUBAI AND ABUDHA...+971581248768>> SAFE AND ORIGINAL ABORTION PILLS FOR SALE IN DUBAI AND ABUDHA...
+971581248768>> SAFE AND ORIGINAL ABORTION PILLS FOR SALE IN DUBAI AND ABUDHA...
 
Apidays Singapore 2024 - Building Digital Trust in a Digital Economy by Veron...
Apidays Singapore 2024 - Building Digital Trust in a Digital Economy by Veron...Apidays Singapore 2024 - Building Digital Trust in a Digital Economy by Veron...
Apidays Singapore 2024 - Building Digital Trust in a Digital Economy by Veron...
 
Corporate and higher education May webinar.pptx
Corporate and higher education May webinar.pptxCorporate and higher education May webinar.pptx
Corporate and higher education May webinar.pptx
 
Boost Fertility New Invention Ups Success Rates.pdf
Boost Fertility New Invention Ups Success Rates.pdfBoost Fertility New Invention Ups Success Rates.pdf
Boost Fertility New Invention Ups Success Rates.pdf
 
Cloud Frontiers: A Deep Dive into Serverless Spatial Data and FME
Cloud Frontiers:  A Deep Dive into Serverless Spatial Data and FMECloud Frontiers:  A Deep Dive into Serverless Spatial Data and FME
Cloud Frontiers: A Deep Dive into Serverless Spatial Data and FME
 
Real Time Object Detection Using Open CV
Real Time Object Detection Using Open CVReal Time Object Detection Using Open CV
Real Time Object Detection Using Open CV
 
DBX First Quarter 2024 Investor Presentation
DBX First Quarter 2024 Investor PresentationDBX First Quarter 2024 Investor Presentation
DBX First Quarter 2024 Investor Presentation
 
Artificial Intelligence Chap.5 : Uncertainty
Artificial Intelligence Chap.5 : UncertaintyArtificial Intelligence Chap.5 : Uncertainty
Artificial Intelligence Chap.5 : Uncertainty
 
A Beginners Guide to Building a RAG App Using Open Source Milvus
A Beginners Guide to Building a RAG App Using Open Source MilvusA Beginners Guide to Building a RAG App Using Open Source Milvus
A Beginners Guide to Building a RAG App Using Open Source Milvus
 
2024: Domino Containers - The Next Step. News from the Domino Container commu...
2024: Domino Containers - The Next Step. News from the Domino Container commu...2024: Domino Containers - The Next Step. News from the Domino Container commu...
2024: Domino Containers - The Next Step. News from the Domino Container commu...
 
How to Troubleshoot Apps for the Modern Connected Worker
How to Troubleshoot Apps for the Modern Connected WorkerHow to Troubleshoot Apps for the Modern Connected Worker
How to Troubleshoot Apps for the Modern Connected Worker
 
AXA XL - Insurer Innovation Award Americas 2024
AXA XL - Insurer Innovation Award Americas 2024AXA XL - Insurer Innovation Award Americas 2024
AXA XL - Insurer Innovation Award Americas 2024
 
ProductAnonymous-April2024-WinProductDiscovery-MelissaKlemke
ProductAnonymous-April2024-WinProductDiscovery-MelissaKlemkeProductAnonymous-April2024-WinProductDiscovery-MelissaKlemke
ProductAnonymous-April2024-WinProductDiscovery-MelissaKlemke
 
Why Teams call analytics are critical to your entire business
Why Teams call analytics are critical to your entire businessWhy Teams call analytics are critical to your entire business
Why Teams call analytics are critical to your entire business
 
Powerful Google developer tools for immediate impact! (2023-24 C)
Powerful Google developer tools for immediate impact! (2023-24 C)Powerful Google developer tools for immediate impact! (2023-24 C)
Powerful Google developer tools for immediate impact! (2023-24 C)
 

Nature and scope of managerial economics ppt @ mba 2009

  • 1. Nature and Scope of Managerial Economics
  • 2. Chapter 1 OVERVIEW  How Is Managerial Economics Useful?  Theory of the Firm  Profit Measurement  Why Do Profits Vary among Firms?  Role of Business in Society  Structure of this Text
  • 3. Chapter 1 KEY CONCEPTS  managerial economics economic profit  theory of the firm profit margin  expected value return on stockholders' maximization equity  value of the firm frictional profit theory  present value monopoly profit theory  optimize innovation profit theory  satisfice compensatory profit theory  business profit  normal rate of return
  • 4. How Is Managerial Economics Useful?  Evaluating Choice Alternatives  Identify ways to efficiently achieve goals.  Specify pricing and production strategies.  Provide production and marketing rules to help maximize net profits.  Making the Best Decision  Managerial economics can be used to efficiently meet management objectives.  Managerial economics can be used to understand logic of company, consumer, and government decisions.
  • 5.
  • 6. Theory of the Firm  Expected Value Maximization  Owner-managers maximize short-run profits.  Primary goal is long-term expected value maximization.  Constraints and the Theory of the Firm  Resource constraints.  Social constraints  Limitations of the Theory of the Firm  Alternative theory adds perspective.  Competition forces efficiency.  Hostile takeovers threaten inefficient managers.
  • 7.
  • 8. Profit Measurement  Business Versus Economic Profit  Business (accounting) profit reflects explicit costs and revenues.  Economic profit.  Profit above a risk-adjusted normal return.  Considers cash and noncash items.  Variability of Business Profits  Business profits vary widely.
  • 9. Why Do Profits Vary Among Firms?  Disequilibrium Profit Theories  Rapid growth in revenues.  Rapid decline in costs.  Compensatory Profit Theories  Better, faster, or cheaper than the competition is profitable.
  • 10. Role of Business in Society  Why Firms Exist  Business is useful in satisfying consumer wants.  Business contributes to social welfare  Social Responsibility of Business  Serve customers.  Provide employment opportunities.  Obey laws and regulations.
  • 11.
  • 12. Structure of this Text  Objectives  Understand usefulness of economics in describing managerial behavior.  Understand how economics can be used to improve managerial decisions.  Appreciate vital role of business in society.