Managerial Economics is one of the most crucial aspects of an organization which can’t be ignored as it helps to take the best decisions in the business world which certainly leads to future growth. Managerial Economics is defined as an integration of economic theories with the practices of business which stands on its fundamental concepts. In this blog, we will learn about these concepts Managerial Economics. You can also hire Managerial economics assignment help for more detail.
The basic fundamentals of managerial economics follow the statistical & mathematical equations which can help senior officials to take the right decisions at the right time. To fulfil the goals, they keep records of tools, techniques, resources, economic concepts, and so forth.
Let us have a look on Managerial Economics One by One
Theory of the firm
This concept solely deals with a primary goal that is “profit”. All the decisions are taken to achieve a single goal that is to earn more and more profit. Surely, it is important for an organization to offer different goods or products for which the audience looking for. However, it is essential to take care of environmental concerns so that it can simultaneously fulfil the needs of people without harming the environment. So, in the theory of the firm, the company usually make decisions after analyzing each advantage and disadvantage to get the optimal results.
Theory of Market Structure/Pricing
Those companies who want to achieve a high success rate or you can say utmost profit, it is significant for them to consider the market structure. There are basically four types of market structures, they are as follows:
- Monopolistic Competition,
- Perfect Competition,
All these market structures help to determine the existing position of completion in the marketplace. As it is the only “competition” which fixed the amount or price of a specific product or goods. That means, the profit can be calculated by knowing the market structure and pricing.
Theory of Consumer Behaviour
This theory deals with the buying habits of the customers. There are so many factors are there which need to be estimated for taking decisions like demographics, socioeconomic issues, income. If any organization wanted to increase profit, then it is needed to focus on the satisfaction level of customers. If you want to gather more information regarding this theory, you can hire Economics assignment help.
Managerial Economy Theory Application
These above theories help to take decision-related to inventory management, finance, marketing, and production. Once you are able to understand these concepts, then you can easily allocate your resources at the right destination. Along with that, you can make the best decisions for the growth of your organization.