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CHARACTERISTICS OF MANAGERIAL ECONOMICS 1. Uses theory of firm: Managerial economics uses economic principles and conceptsthat are known as theory of Firm or 'Economics of the
managerial principles to consider when determining level of output of afirm
THE ACCELERATION PRINCIPLE Suppose that there is a given ratio between the level of output Y t at any time t , and the capital stock required to produce it K t and that
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State the Demand analysis Analysis of demand is assumed to forecast demand that is a basic component in managerial decision-making. Demand forecasting is of importance since
Thinking about modifications in the model again: Go back to the original model again, but add a marginal propensity to invest, this is, suppose that I = f ( i and Y). The MPI is d
Autonomous Expenditure Also called Exogenous expenditure, is any expenditure that is taken as a constant or unaffected by any economic variables within our theory. For instan
Explain about the Pricing analysis Microeconomic methods are employed to examine lots of pricing decisions. This includes transfer pricing, price discrimination, joint product
a critique of the relevance of managerial economics
Disadvantages of Barter Trade It is impossible to barter unless A has what B wants, and A wants what B has. This is called double coincidence of wants and is difficult t
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