* assessment of investible funds
* selecting business area
* choice of product
* determining optimum output
* determining price of product
* determining input-combination and technology
* sales promotion.
Almost any business decision can be analyzed with managerial economics techniques, but it is most commonly applied to: * Risk analysis - various models are used to quantify risk and asymmetric information and to employ them in decision rules to manage risk. * Production analysis - microeconomic techniques are used to analyze production efficiency, optimum factor allocation, costs, economies of scale and to estimate the firm's cost function. * Pricing analysis - microeconomic techniques are used to analyze various pricing decisions including transfer pricing, joint product pricing, price discrimination, price elasticity estimations, and choosing the optimum pricing method. * Capital budgeting - Investment theory is used to examine a firm's capital purchasing decisions. At universities, the subject is taught...