Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Managerial economics

this slide is about managarial economics, and i did it for helping students who are studing economics. it contains

  • Login to see the comments

  • Be the first to like this

Managerial economics

  1. 1. Managerial economics• Goals of the firm• Goals of the firms are many but there are major goalsthat firm struggles to obtain and they are:• Profit maximization• To minimize cost of production• To create a high market share• To increase productivities and revenue• To industry leader in market innovation and so on• Growth rate sales revenue maximization and• Consumer satisfaction
  2. 2. Managerial economics• Production function• Economics, a production function relates physical outputof a production process to physical inputs or factors ofproduction to produce o product.• In mathematically production function is the form of Q=f(capital, labor, land and or row materials entrepreneurship).• Breakeven point• In economics breakeven point is the point which the cost orexpenses and revenue are equal, there is no loss or gain.On the other hand breakeven point is where the totalrevenue and total cost are meeting. In the linear case thebreak-even point is equal to the fixed costs divided by thecontribution margin per unit.
  3. 3. Managerial economics• Low of diminishing returns• A concept in economics that if one factor of production (number ofworkers, for example) is increased while other factors (machinesand workspace, for example) are held constant, the output per unitof the variable factor will eventually diminish. That is called low ofdiminishing returns.•• Low of supply• The low of supply states that, in increase in price will lead anincrease in quantity supplied in this way there is direct relationshipbetween price and quantity supplied. According to managers thewill increase productivity because one of the main objectives of thefirm is profit maximization.
  4. 4. Cost function• Cost function•• The cost function is a function of input prices andoutput quantity. Its value is the cost of makingthat output given those input prices. Amathematical formula used to predict the costassociated with a certain action or a certain levelof output. Businesses use cost functions toforecast the expenses associated withproduction, in order to determine what pricingstrategies to use in order