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Managerial Economics and Business Environment - Assignment Example

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In the paper “Managerial Economics and Business Environment,” the author provides the study of integration between economics and practical issues, which is nothing but Managerial Economics. It influences the decision-making process of the managers…
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Managerial Economics and Business Environment
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Download file to see previous pages Once the above said subject matter is clearly sorted out, the next emphasis would be on the concepts like the opportunity costing, incremental principle, marginal principle, discounting principle, the principle of time perspective, and calculation of economic profit as the guidelines to the scope of managerial economics. (Surender. V, 2008).
To start with, we consider a firm for which different processes have to be carried to achieve its objectives of profit maximization (assuming that all the organizations work with the view to maximize profits). If firms from different sectors are identified simultaneously, then the working of the economy as a whole could also be analyzed which in turn is useful in the decision-making process of every single firm.
Taking this into consideration, four of the FTSE top 100 firms viz. Vodafone plc., BATS., Glaxo Smithkline, and Royal Dutch Shell have been identified for an analysis of the practices they are engaging in, to maintain themselves growth-oriented even in such a recessionary scenario. Along with the concepts of managerial economics, a bird’s eye view about what these companies would be helpful in understanding the concepts better. (Anon, 2008 – 1).
Demand Analysis: Any firm will be able to operate only if its products are in demand in the eyes of the consumer. A firm that produces unwanted products cannot sustain for long in the market. Demand for a good is in itself a function of various factors like it’s price P(x), price of its competitor P(c), tastes of the consumers (T), income which the consumer is willing to dispose of (I), Money expended on advertisements (A) and several other factors like the goodwill. ...Download file to see next pagesRead More
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