Question

Reflect on the assigned readings for Week 4 and then type a two page paper regarding what you thought was the most important concept(s), method(s), term(s), and/or any other thing that you felt was worthy of your understanding. Define and describe what you thought was worthy of your understanding in half a page, and then explain why you felt it was important, how you will use it, and/or how important it is in managerial economics. After submitting your two page paper as an initial post in the "Reflection and Discussion Forum," then type at least two peer replies in response to your classmates posts (200 word minimum each).

Topics:

law of diminishing marginal return, constant return to sale, decreasing return to sale or diseconomies of scale, increasing return on scale or economics of sale, learning curve of the economics, economies and diseconomies of scope.

Answer 1

Business and industrial enterprises aim at earning maximum proceeds.In order to acheive this objective a managerial executive has to take recourse in decision making,which is the process of selecting a specified course of action from a number of alternatives.a sound decision requires fair knowledge of the aspects of economic theory and tools of economic analysis,Which bare directly involved in the process of decision making.since managerial economics is concerned with such aspects and tools of analysis.it is pertinent to the decision making process.

The law of diminishing marginal returns states that in a production process as one input variable is increased ,there will be a point at which the marginal per unit output will start to decrease,holding all other factors constant. - There is a inverse relation between returns of inputs and the cost of production,although other features like market condition can also effect production costs

Constant return to scale describe what happen to long run returns as the scale of production increases,when all input levelsb including physical capital usage are variable.3 possible type of return to scales are :Increasing return to scale ,Constant return to scale , Diminishing return to scale

Increasing return to scale :  If output increases by more than the propotional change in all inputs

Constant return to scale : If output increases by the same propotional change as all inputs change

Diminishing return to scale : If output increses by less than that propotional change in all inputs