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FUNDAMENTALS OF ECONOMICS Fundamental microeconomic concepts provide the foundation for all analysis in managerial economics. There are four important concepts which are demand and supply, marginal an
FUNDAMENTALS OF ECONOMICS
Fundamental microeconomic concepts provide the foundation for all analysis in managerial economics. There are four important concepts which are demand and supply, marginal analysis, net present value, and the meaning and measurement of risk. This week you will focus on learning economic concepts that will increase your knowledge in order to make sound managerial decisions from an economic perspective.
Learning Objectives:
- Understand the objectives of a firm, theory of profit, and the responsibility of management through defining managerial economics and fundamental economic concepts.
- Define demand function
- Construct a demand schedule
- Define supply function and marginal analysis (net present value)
Discussion Board – Demand Function
Demand function specifies other factors that management will often consider, including the design and packaging of products, the amount and distribution of the firm’s advertising budget, the size of the sales force, promotional expenditures, the time period of adjustment for any price changes, and taxes or subsidies. For this discussion forum, consider your favorite consumer product (e.g. cell phone, car, cereal, restaurant, hair gel, etc.) and describe the variables that might be part of the demand function (i.e. substitute good, complementary good, income level, advertisement, consumer preference, etc.) for this product. How would you describe the elasticity of demand for this product – is it highly or somewhat elastic or inelastic? Why?
