2. MANAGERIAL ECONOMICS Douglas - Managerial economics is .. the
application of economic principles and methodologies to the
decision-making process within the firm or organization. Pappas
& Hirschey - Managerial economics applies economic theory and
methods to business and administrative decision-making. Managerial
Economics Unit-I MANAGERIAL2ECONOMICS (Batch 2012-14)10/25/2012 3.
These Definitions Cover a Numberof Different Approaches 1. Analysis
based on the theory of the firm 2. Analysis based upon
managementsciences 3. Analysis based upon
industrialeconomicsRelated to, but not the same as management
scienceManagerial Economics Unit-I MANAGERIAL3 ECONOMICS (Batch
2012-14)10/25/2012and industrial economics. 4. The Use of Economic
Models Derives useful theories with testable propositions about
WHAT IS. Provides the basis for value judgments on economic
outcomes. WHAT SHOULD BE Managerial Economics Unit-I
MANAGERIAL4ECONOMICS (Batch 2012-14) 10/25/2012 5. ECONOMICS IS
WHATECONOMISTS DO Managerial Economics Unit-I MANAGERIAL5ECONOMICS
(Batch 2012-14)10/25/2012 6. Economists are primarily engaged in
analyzingand providing answers to manifestations of themost
fundamental problem, SCARCITY. Scarcity results from: Human wants
are virtually unlimited and insatiable, Economic resources to
satisfy these demands are limited.Managerial Economics Unit-I
MANAGERIAL6 ECONOMICS (Batch 2012-14) 10/25/2012 7. Thus we cant
have everythingwhat we want We must make choices: What to produce
How to produce For whom to produce.Managerial Economics Unit-I
MANAGERIAL7 ECONOMICS (Batch 2012-14)10/25/2012 8. Market demand
curveShows the amount of a commodity that buyers would like to
purchase at various pricesPriceDemand Quantity 9. Market supply
curveShows the amount of a commodity that sellers would offer at
various pricesPriceSupply Quantity 10. Market equilibrium priceA
price that can be maintainedPrice SupplyE is the state of balance,
fromwhich there is no tendency tochange.E P DemandQuantityQ 11.
Demand shifts: leftPrice SupplyDemandQuantity 12. Demand shifts:
rightPrice SupplyDemand Quantity 13. Supply shifts: rightPrice
Supply Demand Quantity 14. Supply shifts: leftPrice Supply Demand
Quantity 15. THANK YOU Managerial Economics Unit-I MANAGERIAL15
ECONOMICS (Batch 2012-14)10/25/2012
