Week 1 eActivity
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.
January 13, 2013
Tuesday, February 1, 2011 4:49:05 PM EST
Sunday, January 6, 2013 9:47:19 PM EST
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"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. •
Analyze the principal-agent problem to determine how the relationship could be less adversarial. Provide support for your rationale.
From the e-Activity, assess how business leaders use managerial economics to make business decisions indicating how profits may be impacted.
Managers use managerial economics to make business decisions regarding their customers, competitors, suppliers, and internal functions of the company. All of these have a big impact on the company’s profits and using managerial economics helps management to solve the company’s problems. Managerial economics deals with the prices/funding of goods and services and allocations of resources. It is known to be very helpful for management in price, production, and risk analyses, budgeting, and determination of demand. Management needs to make sure that the prices they have decided for the company’s goods and services are at the right level and angle for the market to make a noticeable stance amongst their competitors. If the pricing isn’t where it should be for the appropriate market and the right target(s), then the risk to the company needs to be analyzed, while focusing on how much (if any) of a loss the company is taking and working on budgeting appropriately. All of this helps management to determine the type of demand for their...
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