The document outlines several key principles of managerial economics: 1) The incremental principle states that a decision is rational if it leads to increased profits by either increasing total revenue more than total costs, or decreasing total revenue less than total costs. 2) The opportunity cost principle refers to the cost of the next best alternative forgone when choosing between alternatives. It is the minimum price needed to retain a factor in its current use. 3) The discounting principle states that when a decision impacts costs and revenues over the long run, they must be discounted to present values to properly compare alternatives.

1. Principles Of Managerial Economics Group1

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