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Essay / Research Paper Abstract
This 8 page paper looks at how managerial economics is used and the advantages and disadvantages associated with its use. Concepts discussed include supply and demand, pricing, elasticity, forecasting and the use of least squares regression and capital budgeting tools. The bibliography cites 10 sources.
Page Count:
8 pages (~225 words per page)
File: TS14_TEmangecc.rtf
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Unformatted sample text from the term paper:
it using a range of tools that are available and with the inputs and the analysis they will reach a decision. The tools which are used can dependant on the
type of decision that is to be made and the perceptive or prioritises of the decision maker. One approach that is seen in all companies is the use of managerial
economics, this is where aspects of economics are applied to help with decision making in business. When considering the use of managerial economics there are both advantages and disadvantages
to the users. Michael Porter has argued that sometimes a fast bad decision can be better than a good decision that takes a long time to make (Mintzberg et al,
2003). However, the use of managerial economics, or even a basic understanding of it can help to speed up the decision making process and give a logical approach to help
with the way data is transformed into decisions and strategy (Thompson, 2005). The range of tools which can be used are broad, one of the simplest examples is that
of supply and demand. The concept is simple; the price goods sell at is a point of equilibrium where the supply and the demand cross. The stock market is the
prime example of this. Where there is a demand that exceeds supply then the process will increase. The increase in price has two impacts, it will discourage buyers who will
be out off as the prices rises, it may also encourage more people to sell as they will gain higher revenues for the sale. This will result in a new
point of equilibrium being met where there are the same numbers of buyers and sellers (Herrin, 2007) The converse is also true, where
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