Question

- Define managerial economics, and illustrating how it is a valuable tool for analyzing many business situations?
Explain the Significance of Marginal Analysis in Managerial Economics?

Answer 1

Managerial Economics.

• Branch of Economics.
• Deals with the application of microeconomic analysis.
• Helps in decision making for businesses.

Valuable tool because​

• Studies problems and businesses of individual business firm.
• Provides rules for improving managerial decisions.
• Develop vital tools for business decision making.
• Identifies ways to efficiently achieve goals.

Improves management decision making.

• marginal Analysis
• It examines costs and benefits of a marginal change in the production of goods.
• Helps people and business in deciding how to allocate their resources to minimize cost and maximize benefits.
• Helps in maximizing profit.
• Predicts and measures the impact.of per unit changes on organizations goal.
• Helps in making business decisions from hiring additional workers to spending additional hours on project.
• Help in moulding pricing and output decisions.
• Guide production process.
• Affect quality choices.