Managerial Economics - business degree

Category Archives: Managerial Economics

The Signs That Lead To Change

The Signs That Lead To Change

The Signs That Lead To Change

Do you ever get this feeling like you have a hunch on something and you want to explore more of it to make sure that your following the right track, or your just trying to figure out where it will take you sort of investigate, well the number one aspect to check out is how deep your understanding of the firm’s incentives. What are incentives you ask they play the most important role in your business/firm because they answer two main questions:

– how resources are utilized
– how hard individuals work

If you construct proper incentives that will help you enhance productivity and profitability, because its your firm’s base which should be done properly with the best managerial help. This usually provides profit signals it helps managers make a forecast for themselves, that if your product is expensive then it should fall in the highly valued society category which could help more and more industries start flowing in to that society.

As a manager who directs resources and designs incentive schemes you should be aware that there are many types of different profits such as Accounting profit it is considered the explicit cost of resources needed to produce goods and services which is the difference between sales and product cost which are always reported in the firm’s income statement,Economic profit which is the difference between revenues and opportunity cost, and by common sense opportunity cost is the cost of implicit and explicit resources that are foregone when a decision is made.

Managers have a very hard time drawing up economical perspectives such making goals depending on the countries economic status by trying to figure out what is available and what isn’t which is so confusing that’s where the science of managerial economics comes in, to be good at such a field you have so many preparations to make because managerial economics in brief is the study of how managers can achieve goals under a given set of constraints.

The majority of managerial positions is they always make the same mistake they look at the worldwide forecast hoping to change something in there strategy to fit with that when they could just make simple identifications of goals and constraints, to the types of decisions made in economics are sound decision meaning based on what you hear to decide upon what to maximize and minimize which always leads to making the right decisions, the other type is strive decision based upon ambition and willingness to achieve a goal , even when facing measure scarcity constraints.

Put in mind that Economics is used in every little inch in our lives and that you should try and tie with all the things you know because a business is nothing without a manger and definitely managerial economics.