Managerial Economics: Concepts and Principles

Economic principles inform good business decision making. Although
economics is sometimes dismissed as a discourse of practical relevance to
only a relatively small circle of academicians and policy analysts who call
themselves economists, sound economic reasoning benefi ts any manager
of a business, whether they are involved with production and operations,
marketing, fi nance, or corporate strategy. Along with enhancing decision
making, the fi eld of economics provides a common language and framework
for comprehending and communicating phenomena that occur
within a business, as well as between a business and its environment.
This text addresses the core of a subject commonly called managerial
economics, which is the application of microeconomics to business decisions.
Key relationships between price, quantity, cost, revenue, and profi t
for an individual fi rm are presented in the form of simple conceptual
models. The text includes key elements from the economics of consumer
demand and the economics of production. The book discusses economic
motivations for expanding a business and contributions from economics
for improved organization of large fi rms. Market price- quantity equilibrium,
competitive behavior, and the role of market structure on market
equilibrium and competition are addressed. Finally, the text considers
market regulation in terms of the generic problems that create the need
for regulation and possible remedies for those problems.
Although the academic literature of managerial economics often
employs abstract mathematics and large corporations create and use
sophisticated mathematical models that apply economics, this book
focuses on concepts, terminology, and principles, with minimal use of
mathematics. The reader will gain a better understanding of why businesses
and markets function as they do and how those institutions can
function better.