- Managerial economics Managerial economics mainly involves the management of scarce resources and reducing the expenses of the organization. The field teaches managers to plan and control the costs of the firm. After reflecting on Week 3, it is clear that the most important concepts are associated with pricing. It is also worthy to note that various types of demands exist in economics. The important ones are aggregate demand and price elasticity. Factors such as the substitute for a product, greater brand demand, and lesser industry demand and a long-time period increase the elasticity of demand. These concepts are important in managerial economics because business managers will make decisions based on the pricing strategies and demand of the consumers. They are profit-seekers, and the only way of ensuring long-term profit is to raise the price of a product. Nevertheless, it is necessary to consider the demand aspect of it. Otherwise, companies will fail to compete with industry rivals.
- In Week 3, the terms, concepts, and methods used in managerial economics have been highlighted, and the necessity of understanding the concepts related to pricing has been realized. Managerial economics is concerned with the complete usage of financial resources and sustenance of scare resources. Managers and leaders are able to predict trends by analyzing the demand for a product and buying patterns of customers. Here, the concept related to pricing has been considered important and worthy of understanding. The experts highlighted the existence of two types of demands. These are price elasticity of demand and aggregate demand. Similarly, a range of factors has a direct impact on demand elasticity. These are the availability of a substitute of any product, less demand of industry and greater brand elasticity, and lastly, time span of the product. Hence, it is worthy to consider these concepts while attempting to know about managerial economics. The purpose is to thrive in a competitive market.
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