essay on managerial economics

84 Managerial Economics Essay Topic Ideas & Examples

🏆 best managerial economics topic ideas & essay examples, 🔎 good research topics about managerial economics, 👍 simple & easy managerial economics essay titles, ❓ managerial economics essay questions.

• Louis Vuitton Company’ Managerial Economic As the analysis of the company’s current position in the retail market and the strategies adopted by its leader show, LV will have to alter some of its marketing and leadership-related principles as well as […]
• The Epix Firm’s Managerial Economics and Business Strategy Currently, the subscribers in the movie channels are price sensitive and less likely to see the value of the new program tiers or media channels.
• Managerial Economics: Solving the Principal Agent Problem The five forces framework is aimed to analyze the level of competition within a particular industry in order to draw conclusions about the profitability of this industry and, consequently, the profitability of organizations that operate […]
• Strategic Bargaining in Managerial Economics The bargaining party with the most leverage stands to gain a 75% advantage from the negotiations if they choose to commit to a strategy in a “game of chicken”.
• Managerial Economics: Tesla, Inc. It reflects on Tesla’s position in the market of electric vehicles and presents the analysis of the company’s decision to reduce its workforce.
• Managerial Economics and Demand Effective demand refers to the desire to buy, the willingness to pay, and the ability to pay for goods and services.
• Marginal Analysis: Managerial Economics It is based on the study of the causal relationship between sales, costs, and profit and the division of costs into fixed and variable.
• Managerial Economics: Unilever Corporation Market demand, which refers to the demand for a group of products that represent industry, is distinguishable from company demand and the demand of a control unit.
• Managerial Economics: Pepsi Cola Company Whether the conflict between the three divisions hinder the company to compete in the market; Whether the present structure is cost-competitive; and Whether the present organizational structure will be able to meet the challenge posed […]
• Global Managerial Economics in Different Nations Nations more open to the world economy score above the less globalized countries in respect for the rule of law and protection of property rights.
• Managerial Economics Conceptions Therefore, it will appear that the total amount of the fee is $20,000 and that the student pays less than half of the fees.
• Value Creation & Conflict Resolution in Management Value could be created by lowering the cost of production and changing the prices of substitutes to increase demand. The first step is to diagnose the cause of the conflict by listening to the involved […]
• Managerial Economics and Its Principles It is the cost assigned to one unit of the product produced by the company. In such a market, the MR curve is horizontal, and it is equal to the price.
• Private Aviation in Managerial Economic Analysis In 2008, the demand for the jets that are usually used in private aviation was extremely high. The price of the jets that are often used in private aviation tends to change.
• Managerial Economics and Organizational Architecture Leadership is essential not only in the proactive transformational change within the organization but also in the achievement of the organizational goals and objectives.
• Bank of America: Managerial Economics and Analysis The article also integrates how the economic situation of today affects the strategic decisions made by the company and the managerial economics exhibited in the company.
• Managerial Economic Opportunity Cost The first part covers the definition of opportunity cost and an example of a situation that gives rise to opportunity cost.
• Managerial Economics – A Pharmaceutical Company There are also other factors to take into consideration, such as the market value of a future product and the costs of the research.
• Applied Managerial Economics: SWOT Analysis
• Who Are the Biggest People Involved With Managerial Economics?
• Managerial Economics: Summary and Perspectives
• Can Managerial Economics Aid the Chief Executive Officer?
• What Are the Top Managerial Economics Theories That Are Used?
• Managerial Economics: Use, Advantages, and Disadvantages
• Difference Between Economics and Managerial Economics
• How Managerial Economics Affect a Publicly Traded Firm
• Managerial Economics: Analyzing Strategic Behavior in Business
• The Relationships Between Managerial Economics and Business Strategy
• Correlations of Managerial Economics and Capital Budgeting
• Managerial Economics and Corporate Governance in Heineken
• The Link Between Managerial Economics and Global Competition
• How Understanding Managerial Economics Can Help Managers in Global Environments
• Self-Education of Entrepreneurs in Managerial Economics Concepts to Run Successful Enterprises
• Difference Between Theoretical Managerial Economics Strategies and Real-World Solutions
• Teaching Managerial Economics in Higher Education – Practices and Challenges
• Link Between Managerial Economics and Business Strategies and Formulating Implications
• Firm Strategic Management Through the Resource-Based Lens
• Managerial Economics and Implications for Agricultural Decision Making
• Managerial Economics and Its Application in Banking Sector
• The Relations Between Managerial Economics and Organizational Architecture
• Managerial Economics: Perfect Competition and Monopoly
• Mezzo Economics Analitycal Approach as the Propulsive Part of Managerial Economics
• The Nature and Scope of Managerial Economics
• Applying Managerial Economics in Practice
• The Biggest Technological Breakthroughs With Regards to Managerial Economics
• Type of Professionals Work in the Managerial Economics Space
• How Can Managerial Economics Be Improved in the Future?
• Analyzing the Importance of Managerial Economics
• Managerial Economic Perspective of the Maker of Tutor’s Frozen Feasts
• The Place of Managerial Economics in the 21st Century
• Comparing and Analyzing Different Tools of Managerial Economics
• Overview of the Global Managerial Economics in the Current World
• Analyzing the Most Effective Solutions for Managerial Economics
• The Interplay of Intuition, Luck, and Knowledge in Factor Markets in Emerging Economies
• Gender Impact on Execution of Business Strategy for Effective Economics Performance
• The Compatibility Between Organizational Theory and Managerial Economics Frameworks
• Using Managerial Economics Models for Decision Support Systems in Service Industries
• Managerial Economics and Implications for Facilities Management in Community Environments
• What Is the Difference Between Economics and Managerial Economics?
• Is Managerial Economics a Branch of Economics?
• What Is the Nature and Scope of Managerial Economics?
• How Many Types of Managerial Economics Are There?
• What Is Managerial Economics Related With?
• Who Is the Father of Managerial Economics?
• What Are the Limitations of Managerial Economics?
• Is There a Relationship Between Managerial Economics and Statistics?
• What Are the Different Areas of Managerial Economics?
• How Is Managerial Economics Used in Decision-Making?
• What Are the Central Problems of an Economy in Managerial Economics?
• What Is the Role and Responsibility of Managerial Economics?
• Can Novice Entrepreneurs Self-Educate Themselves in Managerial Economics Concepts Run Successful Enterprises?
• What Is the Application of Managerial Economics?
• How Many Basic Concepts Are There in Managerial Economics?
• What Is the Law of Demand in Managerial Economics?
• What Is the Difference Between Managerial Economics and Economic Theory?
• Is Managerial Economics Applied in Decision-Making?
• What Are the Basic Concepts of Managerial Economics?
• How Can Self-Help Books on Managerial Economics Help Businessmen to Diagnose Issues and Arrive at Practical Solutions?
• What Are the Uses and Importance of Managerial Economics?
• What Are the Tools of Managerial Economics?
• Are There Similarities Between Managerial Economics and Managerial Accounting?
• What Is the Nature of Managerial Economics?
• What Is the Role of Managerial Economics in Business?
• Bureaucracy Paper Topics
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• Budget Ideas
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IvyPanda. (2024, February 28). 84 Managerial Economics Essay Topic Ideas & Examples. https://ivypanda.com/essays/topic/managerial-economics-essay-topics/

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113 Managerial Economics Essay Topic Ideas & Examples

Inside This Article

Managerial economics is a branch of economics that applies economic theory and quantitative methods to the study of managerial decision-making. It helps managers make informed decisions by analyzing how economic forces affect their organizations. If you are studying managerial economics or need to write an essay on the topic, this article will provide you with 113 essay topic ideas and examples to choose from.

• The role of managerial economics in decision-making
• The relationship between managerial economics and other disciplines
• How economic theories can help managers understand market dynamics
• The importance of cost analysis in managerial decision-making
• The impact of competition on managerial decision-making
• The role of pricing strategies in managerial economics
• The use of forecasting in managerial decision-making
• The concept of elasticity and its importance in managerial economics
• The relationship between production and cost in managerial economics
• The role of profits in managerial decision-making
• The impact of government regulations on managerial economics
• The importance of risk management in managerial decision-making
• The concept of game theory and its applications in managerial economics
• The role of behavioral economics in managerial decision-making
• The impact of globalization on managerial economics
• The use of data analytics in managerial decision-making
• The role of supply and demand in managerial economics
• The impact of technology on managerial decision-making
• The concept of efficiency and its importance in managerial economics
• The relationship between inflation and managerial decision-making
• The role of consumer behavior in managerial economics
• The impact of advertising on managerial decision-making
• The importance of market research in managerial economics
• The concept of strategic management and its importance in managerial decision-making
• The relationship between ethics and managerial economics
• The impact of mergers and acquisitions on managerial decision-making
• The role of corporate social responsibility in managerial economics
• The importance of innovation in managerial decision-making
• The concept of pricing discrimination and its applications in managerial economics
• The relationship between risk and return in managerial decision-making
• The impact of interest rates on managerial economics
• The role of macroeconomic factors in managerial decision-making
• The importance of decision-making under uncertainty in managerial economics
• The concept of sunk costs and their relevance in managerial decision-making
• The relationship between economies of scale and managerial economics
• The impact of government policies on managerial decision-making
• The role of market structure in managerial economics
• The importance of industry analysis in managerial decision-making
• The concept of market power and its implications for managerial economics
• The relationship between corporate governance and managerial decision-making
• The impact of financial markets on managerial economics
• The role of capital budgeting in managerial decision-making
• The importance of human capital in managerial economics
• The concept of outsourcing and its implications for managerial decision-making
• The relationship between organizational culture and managerial economics
• The impact of organizational structure on managerial decision-making
• The role of leadership in managerial economics
• The importance of teamwork in managerial decision-making
• The concept of supply chain management and its applications in managerial economics
• The relationship between innovation and competitiveness in managerial decision-making
• The impact of disruptive technologies on managerial economics
• The role of environmental sustainability in managerial decision-making
• The importance of strategic alliances in managerial economics
• The concept of corporate strategy and its implications for managerial decision-making
• The relationship between marketing and managerial economics
• The impact of brand equity on managerial decision-making
• The role of customer relationship management in managerial economics
• The importance of product differentiation in managerial decision-making
• The concept of market segmentation and its applications in managerial economics
• The relationship between pricing and profitability in managerial decision-making
• The impact of supply chain disruptions on managerial economics
• The role of inventory management in managerial decision-making
• The importance of quality control in managerial economics
• The concept of total quality management and its relevance in managerial decision-making
• The relationship between lean production and managerial economics
• The impact of just-in-time inventory systems on managerial decision-making
• The role of capacity planning in managerial economics
• The importance of demand forecasting in managerial decision-making
• The concept of production scheduling and its applications in managerial economics
• The relationship between economies of scope and managerial decision-making
• The impact of technological innovation on managerial economics
• The role of research and development in managerial decision-making
• The importance of intellectual property rights in managerial economics
• The concept of competitive advantage and its implications for managerial decision-making
• The relationship between market positioning and managerial economics
• The impact of market share on managerial decision-making
• The role of customer loyalty in managerial economics
• The importance of customer satisfaction in managerial decision-making
• The concept of brand loyalty and its relevance in managerial economics
• The relationship between customer lifetime value and managerial decision-making
• The impact of customer acquisition costs on managerial economics
• The role of customer retention in managerial decision-making
• The importance of customer segmentation in managerial economics
• The concept of customer relationship marketing and its applications in managerial decision-making
• The relationship between customer engagement and managerial economics
• The impact of social media on managerial decision-making
• The role of omni-channel marketing in managerial economics
• The importance of data-driven marketing in managerial decision-making
• The concept of customer analytics and its implications for managerial economics
• The relationship between marketing automation and managerial decision-making
• The impact of personalized marketing on managerial economics
• The role of customer experience in managerial decision-making
• The importance of customer feedback in managerial economics
• The concept of customer journey mapping and its relevance in managerial decision-making
• The relationship between customer satisfaction surveys and managerial economics
• The impact of net promoter score on managerial decision-making
• The role of customer service in managerial economics
• The importance of employee training in managerial decision-making
• The concept of employee engagement and its applications in managerial economics
• The relationship between employee motivation and managerial economics
• The impact of organizational culture on managerial decision-making
• The role of leadership styles in managerial economics
• The concept of performance management and its implications for managerial economics
• The relationship between compensation and incentives in managerial decision-making
• The impact of job satisfaction on managerial economics
• The role of organizational structure in managerial decision-making
• The importance of communication in managerial economics
• The concept of conflict resolution and its relevance in managerial decision-making
• The relationship between decision-making processes and managerial economics
• The impact of decision-making biases on managerial decision-making
• The role of decision-making tools and techniques in managerial economics
• The importance of decision-making under uncertainty in managerial decision-making

In conclusion, managerial economics is a crucial aspect of business management that helps managers make informed decisions in a complex and dynamic business environment. By choosing one of the essay topics listed above, you can explore various aspects of managerial economics and deepen your understanding of how economic principles can be applied to managerial decision-making. Good luck with your essay writing!

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Managerial Economics: Importance, Significance, Nature, Scope, and Role

Meaning of Managerial Economics

Managerial economics refers to the management of business using economic theories, tools, and concepts. It is simply the amalgamation of management principles and economic theories for better problem solving and decision making. It is a branch of economics that applies economic theories for analysis, assumption, and prediction of business conditions.

Managerial economics bridges the gap between economics in theory and economics in practice. It assists the managers in logically solving business problems and rational decision making. The key function of managerial economics is efficient decision making and chooses the most suitable action out of two or more alternatives. It monitors and ensures that all scarce resources like labor, capital, land, etc. are properly utilized to derive better results.

Managerial economics performs three important roles for business organizations : Demand analysis and forecasting, capital management and profit management. Firms with the application of managerial economics optimally decide what to produce, how to produce and for whom to produce.

Role of Managerial Economics

• Studies Business Environment: Managerial economics properly analyze the external environment within which the business operates. These factors influence the working of the business and therefore should be considered while taking any decisions and framing policies. Managerial economic studies all factors like economic scenario, government policies, price trends, national income growth, etc.
• Production Scheduling: Managerial economics manages and prepare schedules for all production activities of business. It estimates all future demands using various quantitative tools which helps in making production plans.
• Control Cost: Controlling the cost is vital for achieving the desired profitability and growth. Managerial economics estimates the cost of all business activities and identify all those factors that cause variations in cost from time to time. It aims at minimizing the cost through optimum utilization of all resources.
• Set Prices: Setting the right price is a very challenging task for every business organization. Managerial economics helps management in fixing the correct price by supplying all information regarding competitors pricing methods.
• Bring Coordination: Managerial economics brings coordination and flexibility in all operations of the business. It supports effective decision making by providing all relevant data using economic theories and tools.
• Investment Analysis: Managerial economics ensures that all business funds are allocated to profitable means. It properly analyzes the profitability of all investment avenues before investing any amount into it.

Importance of Managerial Economics

• Business Planning and Forecasting: Managerial economics plays an efficient role in formulating business policies by forecasting future demands and uncertainties. It assists in the effective decision making of an organization by supplying all information using economic tools and techniques. 
• Analyze Cost and Production level: Managerial economics focuses on minimizing the cost of business. It determines the cost associated with different business processes and finds out the cost-minimizing level of output. Managerial economics enables business managers in ensuring that there is no resource wastage which reduces the overall cost.
• Formulate pricing policies: It helps in determining the right pricing policies for organizations. Pricing method affects the profitability and revenue of the business organization and therefore fixing the right price is essential. Managerial economics analyses the market pricing structure and strategies for deciding the firm prices.
• Manages profit: Managerial economics monitor and control the profitability of the business organization. Profit is the ultimate goal of every business and determines its success or growth. It ensures that the desired profit is earned by making an estimate of the revenue and expenses of an organization at different levels of outputs.
• Capital Management : Capital management is one of the important functions played by managerial economics. It manages and analyses all capital expenditures of business which involves huge expenditures. Before investing any amount anywhere it measures the profitability of such a source for allocating funds. 

Significance of Managerial Economics

• Business Planning : Managerial economics assists business organizations in formulating plans and better decision making. It helps in analyzing the demand and forecasting future business activities.
• Cost Control : Controlling the cost  is another important role played by managerial economics. It properly analyses and decides production activities and the cost associated with them. Managerial economics ensure that all resources are efficiently utilized which reduces the overall cost.
• Price Determination : Setting the right price is one of the key decisions to be taken by every business organization. Managerial economics supplies all relevant data to managers for deciding the right prices for products.
• Business Prediction : Managerial economics through the application of various economic tools and theories helps managers in predicting various future uncertainties. Timely detection of uncertainties helps in taking all possible steps to avoid them.
• Profit Planning And Control : Managerial economics enables in planning and managing the profit of the business. It makes an accurate estimate of all cost and revenue which helps in earning the desired profit. 
• Inventory Management : Proper management of inventory is a must for ensuring the continuity of business activities. It helps in analyzing the demand and accordingly, production activities are performed. Managers can arrange and ensure that the proper quantity of inventory is always available within the business organization.
• Manages Capital : Managerial economics helps in taking all decisions relating to the firm’s capital. It properly analyses investment avenues before investing any amount into it to ensure the profitability of an investment.

Nature of Managerial Economics

• Art and Science:  Managerial economics is termed as both art and science. The application of managerial economics in decision making requires creativity and lots of analytical thinking. It is regarded as science as it uses various economic theories and concepts for managing business and solving problems.
• Management oriented:  Managerial economics is a management-oriented concept. It helps the management in rational decision making and solving all business problems logically by supplying all relevant information.  
• Multi-disciplinary:  Managerial economics is multidisciplinary in nature. It uses principles and theories from various subjects like economics, finance, statistics, marketing, accounting, mathematics, human resource, etc.
• Close to Micro Economics : Managerial economics analyses and solves problems of a particular firm or organization only but not of the whole economy. It focuses on individual units of the economy and provides optimum solutions for facing problems.
• Uses Macro Economics:  Managerial economics properly studies macro or external environment within which business operates for better management of the business. It analyses different external factors that affect the business organization like economy state, government policies, market conditions, etc.
• Prescriptive discipline:  Managerial economics defines course of action for business for attaining goals and objectives. It chooses the best option among all alternatives available for solving the problems.
• Conceptual:  Managerial economics is conceptual in nature as it is based on economic theories and concepts. It does not work on an arbitrary collection of prescriptions but analyze all business problems on the basis of well-established economic concepts.

Scope of Managerial Economics

• Decision making:  Managerial economics helps business organizations in taking effective decisions. It tells how management can use various quantitative tools and economic theories for formulating policies and various managerial decisions.
• Production and cost analysis:  It helps in estimating the cost of production and determines factors causing variations in cost estimates. Managerial economics properly analyses and decides production activities and costs associated with them. It ensures that all resources are efficiently utilized which reduces the overall cost.
• Demand Analysis and Forecasting:  Managerial economics enables the business in analyzing demand and forecasting future uncertainties. An accurate estimate of demand will help in preparing the right production schedules and employing resources accordingly. 
• Pricing policies:  Pricing is one of the key decisions to be taken by every business organization for earning the desired profits and attaining desired growth. Managerial economics supplies all relevant data to managers for deciding the right prices for products. Key aspects covered under this area are Pricing methods, product-line pricing, differential pricing, and price determination in various market forms.
• Profit management:  Managerial economics helps in managing the profit of business organizations. Profit is the main measure for the success or growth of firm in the long run. It helps in making correct estimates of all cost and revenue at different levels of outputs which helps in earning the desired profit.
• Capital management:  Capital investment decisions is one of the most challenging and complex tasks before every manager. Managerial economics helps in planning and managing all capital expenditures of business which requires huge investment. It properly analyses investment avenues before investing any amount into it to ensure the profitability of an investment.

Managerial Economics: Importance, Significance, Nature, Scope, and Role PDF

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2 Managerial Economics: Present And Future

Paul H. Rubin is Samuel Candler Dobbs Professor of Economics at Emory University. His main area of research is law and economics.

Anthony W. Dnes is a Senior Associated Regulatory Scholar at the Mercatus Center in George Mason Law School, and the European Editor of Managerial & Decision Economics.

• Published: 01 October 2013
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This chapter assesses trends in managerial economics, in particular considering the extent to which a convergence may be occurring between managerial economics and mainstream work. Managerial economics is currently developing into “the new managerial economics” that incorporates much organizational economics, including the study of strategic interaction. New work does not so much displace the old, but is more in the nature of an augmentation because of an increased focus on organizational questions related to managing human resources.

2.1 Introduction

The purpose of this essay is to clarify the nature and scope of managerial economics and to examine the direction of new work that is currently emerging from applying techniques of analysis drawn from modern mainstream economics. In assessing future directions, we consider the extent to which a convergence may be occurring between the “new managerial economics” and mainstream economics. The new managerial economics is currently developing internationally in a healthy way by moving away from an older focus on modest questions linked to rational decision making, and toward ever wider applications of economics to business questions, frequently based on applications of modern organizational economics.

The new managerial economics incorporates insights from the analysis of problems connected with agency relationships and strategic interaction, and the results of experimental inquiry. It does not so much displace the old managerial economics as augment it. Frequently the focus is on organizational questions related to managing human resources, and an emphasis on applied work that is well-grounded in theory is still very much a requirement. The overall requirement for good work in the field remains the demonstration of an application of economic analysis to significant managerial questions.

2.2 Trends in Managerial and Decision Economics

In assessing the future direction of managerial economics, it is possible to discern themes of inquiry in the context of modern work that are both interesting and generate useful insights for businesses and future inquiry. Managerial economics is unfolding in a healthy fashion, drawing in the new institutional economics in the widest possible sense. One concern, though, is a need to counterbalance a modern tendency spreading from mainstream economics toward an excessively theoretical inquiry that translates economic analysis into brutal mathematical formalism. All modern work requires some degree of rigor for successful completion, but it is not appropriate for an author to make continual recourse to lemmas and complex theorems, especially if with no practical applications, when writing for a managerial economics audience. Extreme formalism appears to be acceptable in writing for the much smaller audience of professional economists.

Managerial economics has generated empirical work that is carried out using a variety of typically, but not always, quantitative methods. Bear in mind in interpreting this statement that modern econometrics has a considerable role for semiquantitative work that models qualities, for example, based on the methods of logit analysis. There remains a strong connection between managerial economics, operations research, and econometrics applications to real world problems, which can be seen in examining classic texts, such as Baumol (1962) and more recent ones such as Salvatore (2006) . Typical topics represent a synthesis of economics, decision sciences, and business administration, and interact with each other in a scientific way involving testable predictions and subsequent testing. Recognition of the constraints facing firms is important in this work.

It is notable that leading MBA programs, which have long since included overseas offerings such as the one at Cranfield in the UK as well as the earlier prominent programs like Harvard’s, normally include managerial economics courses following the model described above. Often there are variants emphasizing decision sciences or the business environment. Therefore, teaching practice can be seen to some extent as indicating the established ideas in managerial economics. There, developments in recent years have augmented the traditional approach, particularly in areas such as: globalization, the economics of organization, information economics, strategic behavior, the learning organization, risk management, business ethics, and behavioral economics. All of these topics are hot in modern managerial economics and are slowly feeding through into MBA work.

We have identified modern trends as “the new managerial economics.” Some modern texts now use the term explicitly ( Boyes 2008 ) and focus on questions of “organizational architecture” ( Brickley et al. 2008 ), particularly including areas such as incentive structures in personnel economics. An increasing volume of specialist work is emerging in these areas and is featured in influential handbooks ( Lazear and Oyer 2009 ). Personnel economics, for example, applies economics to human resources topics, including information interactions, problems of team coordination, morale, and seniority systems. The area has come a long way in a short time. As Lazear (a former Chief Economic Advisor to the US President and a member of the Editorial Board of Managerial and Decision Economics ) points out, personnel economics now has its own code in the Journal of Economic Literature . In managerial terms, this field is a natural development of the economics of organization and of labor economics, and is likely to develop strongly. Many of the lessons to be learned from personnel economics—for example, the purpose behind seniority wages—match well with the experience of personnel management.

Game theory has made a tremendous impact on microeconomics generally, and it is unsurprising that this has spilled over into many field studies, including managerial economics. Game theory has significant managerial implications since there is a natural desire in business to understand strategic interaction. There is no doubt that game theory has brought insights, at least in the understanding of fairly well-contained market situations, such as dominance and pricing, that would be hard to obtain otherwise. Care must be taken, though, because there are dangers in certain applications of game theory. The approach has really been a part of managerial economics from the start, but it can become arid and disconnected from real world issues quite easily. Without drawing attention to individual pieces of work, it is possible to note that a tendency to create ever more detailed models that assume high levels of information for managers may well generate distinct papers, in a technical sense, but may not add much to our knowledge of management. Feet and ground belong together in managerial economics.

Case studies are still useful and show how decisions are made in the real world. Classic areas such as transfer pricing are still of great interest to firms, not just in theoretical terms but also in terms of practices used, not least because transfer pricing practices are often the target of antitrust investigations. Other areas where case studies can be relevant include benchmarking, antitrust cases more generally defined, the characteristics of entrepreneurship, and the development of particular organizational forms. Coase (1988) and Coase and Wang (2012) has famously argued for much more case-study work in economics on the grounds that a great deal of information can be inferred from such observation, encouraging us to ask businessmen about business practice. We might say, ask carefully. There are pitfalls in asking questions so that response biases spoil the information flow. Avoiding problems is often a matter of using common sense and thinking whether there might be adverse incentive structures surrounding the answering of questions. It is now becoming well-known that people filling out questionnaires tend to report themselves as richer, better looking and more interesting than the average person, which is of course impossible in the aggregate. Biases are often ignored by questionnaire designers, and one cannot help being sympathetic to the pleas for less “abominable snowball sampling” that are often encountered within the business community: the value of questionnaires is questionable.

A good example of case-study work is Reid and Jacobsen’s (1988) monograph on the small entrepreneurial firm, which used focused observation to make a very careful inquiry into the nature of that highly innovative area of the economy. The papers in Masten (1996) and Ricketts (2008) also give a good flavor of this type of work. Case studies, when carried out carefully in relation to well-identified theoretical questions, are an appropriate way to investigate organizational questions and may be the only means available to do so in some cases. Several recent papers on pricing practices ( Levy and Smets 2010 ; Kwapil et al. 2010 ) use case-study methods carefully augmented with statistical analysis.

2.3 Business Ethics and Managerial Economics

A further modern trend is toward incorporating ethics into managerial economics training, or, at least, to juxtapose conventional managerial foci with an ethics focus. Often this will take the form of incorporating concerns about corporate social responsibility, sometimes in terms of social performance and questions of corporate governance, which have generated a series of research questions that show up in the journals. It would be good to see more of this type of work. An argument that managerial economics excludes considerations of ethics has been around for some time ( Green and Lopus 2008 ), but is a little inaccurate. One text with an explicit focus on ethics and corporate social responsibility is Brickley et al. (2008) , which also links these topics to organizational questions, and the journals do show a growing amount of work focusing on the area of ethics and performance.

The growth in recent years in research linking business economics with ethics issues is good to see since economics is currently being challenged on this front, often by managerial subjects that simply jump to conclusions over what is virtuous behavior and how good it must necessarily be. Often these conclusions are associated with benefits from teamwork and team spirit (which is not always good: think of Enron). It would be nice to see more hard thinking about business ethics coming through in practical applications to business questions. Notable recent contributions include work by Geoffrey Heal (2005) , an environmental economist now working at Columbia in the field of corporate social performance and public policy, examining the purpose of corporate philanthropy, and particularly focusing on externality and distributional questions.

An interesting recent direction of research ( Fisman et al. 2009 ) gives a rigorous demonstration showing how philanthropic gestures may be used to signal quality for a firm in a model of monopolistic competition. The signaling model reveals that it is less costly for quality firms to invest in corporate social responsibility, leading to a separating equilibrium in which low-quality firms do not invest in such efforts, and high-quality firms gain a brand advantage. The signaling model explains the frequent empirical observation that corporate social performance improves profitability performance for many firms ( Wood 2010 ).

In many respects, the recent incorporation of corporate social performance into discussions in managerial economics blends observation with well-developed strategic modeling. The direction of the research suggests that philanthropy is rarely aimed at anything other than improving the fortunes of the firm, and that this is based on sound reasoning. Another interesting recent paper focusing on aspects of social performance is Arruñada et al. (2009) who examine the interaction between franchised firms and institutional constraints.

2.4 Is Managerial Economics Converging to the Main Stream?

It can be argued that managerial economics is converging on mainstream economics and losing its separate identity by adopting more and more tools drawn from mainstream economics ( Klein 2011 ). It is true that in the new managerial economics, the demarcation between managerial economics, business strategy, organization theory, personnel, and other applied topics in business administration are increasingly blurred. Klein argues that he could interchange many of the strategy, managerial economics, and standard texts by changing the focus of the courses that he teaches. There is some truth in his claim that much of he modern teaching material is similar across different courses, but, as a matter of judgment, and for the convenience of scholars and practitioners, there appears to be continuing practical value in maintaining a separate subdiscipline focusing on applications of economic analysis to managerial questions.

2.5 How Well Does Managerial Economics Fit with Business Practice?

Business consulting firms have grown in recent decades and use the skill sets of modern managerial economics, including the results of work originating in industrial organization. It might be thought that modern developments push the required skill set of the applied business economist to the breaking point. Strategic analysis and decision making focused on product pricing, horizontal and vertical boundaries of the firm, mergers and acquisitions, and forecasting competitor responses have indeed become very complex. While all this is true, it nonetheless is the case that consulting firms working from an economics base occupy a niche in which they supply clients with services going beyond the accounting services and heuristically based consulting often applied in business. This niche is particularly apparent in providing advice in antitrust cases, regulation, and intellectual property (patent infringement) areas. The application of economic analysis tends to highlight valuable economic effects that are not apparent from simple inspection—for example, market responses to patent infringement. Since the application of economics tends to produce net value to firms, it is in demand notwithstanding its costliness.

The difference between economics consulting and other business advisory services does not reflect hostility between disciplines. Rather, the various advisory approaches represent specialism. The difference between accounting and economic cost is well-known, where the accountant focuses on recorded costs, and the economist focuses on opportunity cost including implied costs. It is not that one of them is ignorant, but rather that the purpose of the information is different; standardized business comparison is aided by historic costs, whereas decision making is best approached through recognizing opportunity costs. Extending those reflections to less obvious matters such as whether to use the hedged price of an input or the market price of an input to measure production cost and determine optimal product prices, economic analysis can provide profitable insights. If a firm can economically hedge its costs, it is making poor decisions if it does not do so.

We do see more and more consulting firms emerging who can assemble a team of experts able to increase the profitable use of sophisticated economic analysis. It is an interesting question to ask how complex managerial economics can get and still be an applied area. We think that the need for convincing application in business settings is unlikely to halt technical improvements in analysis, although the communication of ideas and results will keep the in-house or independent business economist’s feet on the ground.

2.6 International Growth of Managerial Economics

One gratifying recent trend is the growth in managerial economics around the world. Outside of the United States and Canada, the growth has not simply occurred in Europe, Australia, and New Zealand. Management schools with claims to international prestige have also emerged in India and Southeast Asia, and the world is increasingly opening up intellectually. Managerial economics is in increasingly good shape internationally, largely because globalizing economic development has led to sustained growth in management schools. Also, movement of scholars around the world has supported knowledge transfer. Recent papers reflecting this growing internationalism include Lin et al. (2009) , who examine the efficiency of publically traded firms in China.

Journal submissions reflect increasing internationalism. As editors of Managerial and Decision Economics , we have marked the recent trend for paper submissions to reflect this growing internationalism, and estimate that around one half of them now originate outside of North America, with around 35% from Europe and 10% from Asia. Articles originate from authors based in diverse locations, including North America, England, France, Germany, Greece, Hong Kong, India, Israel, Italy, the Netherlands, Norway, Singapore, and Spain. Yet, the topics overlap frequently, showing that the same concerns are shared worldwide and that there is also a shared managerial-economics culture. It is not as if, say, the Chinese are doing things differently from the Europeans these days; we also seem to know much the same things and experience similar problems.

2.7 Behavioral and Managerial Economics

An argument has grown in favor of recognition that the behavioral foundations of economics lack realism, and that increases in realism can in fact improve theoretical insights and, ultimately, predictions in managerial and other settings. In practice, the recognition has grown from the results of experimental economics and a certain interaction between economics and psychology. There need be no total rejection of traditional neoclassical economics as a result of these observations, because behavioral economics really just seeks to improve the behavioral foundations of economics. Indeed, there is evidence that from a normative perspective, when individuals (and businesses) are faced with practical problem solving, they do resort to approaches drawn from neoclassical economics that are based on maximization and efficient use of information in a constrained-choice setting ( Ariely et al. 2003 ).

Many of the insights of behavioral economics have arisen in considering problems of rational decision making under uncertainty. Researchers have found, among other things, that the framing of decision making alters decisions, notions of fairness influence behavior, individuals experience loss aversion giving asymmetrically high valuation of losses compared with gains relative to a concave utility function, individuals experience endowment effects over the value of items traded, and that heuristics are frequently involved in making decisions ( Thaler and Sunstein 2008 ). Many of these observations are consistent with approaches to decision making that invoke bounded rationality ( Williamson 1985 ), so there has always been receptiveness to them among economists working on organizational questions. There are practical implications: for example, loss aversion can be cited to explain patterns of change in price elasticities.

The use of heuristics in business needs much more study, not least because heuristics have both good and bad properties. Decision costs are saved, but this can be at the cost of relying on irrational decision making that can go astray. Experimental results emphasizing people’s innate sense of fairness leading to loss-making punishment strategies also require more study in business settings. Lazear and Oyer (2009) has suggested that, in the area of personnel economics, deviations from strict reward-based incentive schemes often reflect fairness considerations and are targeted at workplace morale. Recent papers taking an experimental/behavioral approach toward managerial decision making include Rosenboim et al. (2008) who find evidence of regret effects and of status-quo bias. These managerial applications of economic psychology are bound to grow.

2.8 Concluding Discussion

Managerial economics has gradually evolved, always reflecting changes within the economics mainstream and some influences from managerial and related studies more widely defined. Contemporary work investigates the nature of corporate social performance, analyzes very detailed issues concerning business administration—so-called “architecture”—in relation to the work of teams and the impact of incentive structures, and draws in behavioral insights in understanding management. It is to be expected that topics of inquiry in managerial economics should mirror wider concerns in the business community. This is healthy, and should make us realize that the emphasis remains very much on applications in the new managerial economics.

We would like to conclude by emphasizing the areas where we believe there are promising prospects for fruitful research. Clearly we are at the very beginning of exploring the behavioral interaction between economic behavior and human psychology in management, and we should expect further work to add productively to our developing knowledge. Together with work on organizational architecture, we might look forward to behavioral work aiding in understanding forensic questions concerning business failure as well as success, including some issues surrounding dysfunctional businesses (such as the incentive failures at Enron that led to fraud). This emphasis should not of course obscure the importance of the continued development of a healthy volume of wide-ranging applications of economics in management, as evidenced by the work showcased in this handbook.

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Managerial Economics Research Guide

Managerial economics, a crucial subject in today’s business environment, combines economic theories and principles with practical decision-making in a managerial context. As businesses face an increasingly competitive and globalized landscape, understanding the application of microeconomic theories and quantitative techniques to make informed decisions is essential. Consequently, students studying managerial economics are often assigned research papers that explore various aspects of this field, fostering a deeper understanding of the subject matter and enhancing their analytical skills.

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The purpose of this page is to provide students pursuing managerial economics with valuable resources that will assist them in selecting and writing their research papers. The primary audience for this page consists of students assigned to write research papers in the field of managerial economics. By offering a comprehensive list of managerial economics research paper topics divided into ten categories, we aim to inspire and guide students as they navigate the often-daunting task of choosing the perfect topic. Each category includes ten thought-provoking topics, making it easy for students to find a topic that resonates with their interests and aligns with their academic goals.

In addition to the extensive list of managerial economics research paper topics, this page also provides expert advice on how to choose from the multitude of managerial economics topics available. This guidance will help students refine their research focus and develop a clear research question that will drive their work. Additionally, we offer insights on how to write an exceptional managerial economics research paper. By following the recommended structure, conducting thorough research, and maintaining academic integrity, students can produce high-quality research papers that showcase their understanding of the subject matter and contribute to the existing body of knowledge.

Lastly, this page presents the writing services offered by iResearchNet. For students who require additional support, our team of expert degree-holding writers is ready to assist with custom-written research papers on any topic within the realm of managerial economics. With a commitment to top quality, in-depth research, and timely delivery, our writing services can help students excel in their academic endeavors.

By providing students with a comprehensive list of topics, expert advice on topic selection and writing, and access to professional writing services, we aim to empower students to successfully complete their managerial economics research papers and contribute to the ongoing development of knowledge in this vital field.

100 Managerial Economics Research Paper Topics

Selecting an engaging and relevant research topic is the first step towards writing a successful research paper in managerial economics. To help you find the perfect topic for your paper, we have compiled a comprehensive list of managerial economics research paper topics, divided into ten categories. Each category focuses on a specific area within the field of managerial economics, and each topic is designed to inspire in-depth research and analysis. By exploring these categories and their respective topics, you can find the one that best aligns with your interests and academic goals.

Demand Analysis and Forecasting

• The impact of consumer behavior on demand forecasting accuracy
• Analyzing the role of big data in improving demand forecasting
• The effect of economic indicators on demand forecasting for specific industries
• Demand forecasting challenges in emerging markets
• The role of seasonality in demand analysis and forecasting
• Assessing the accuracy of qualitative versus quantitative demand forecasting methods
• Demand analysis and forecasting for sustainable products
• The role of social media in demand analysis and forecasting
• Evaluating the impact of price changes on demand elasticity
• Demand forecasting in the context of e-commerce and online retail

Production and Cost Analysis

• Analyzing the relationship between economies of scale and cost efficiency
• The impact of technological advancements on production and cost analysis
• The role of managerial decision-making in minimizing production costs
• Exploring the effects of outsourcing on production costs and efficiency
• Examining the role of automation in production and cost analysis
• Investigating the impact of environmental regulations on production costs
• The relationship between learning curves and cost efficiency
• Analyzing the cost structure of startups versus established businesses
• The role of location in production cost analysis
• The impact of resource scarcity on production costs and strategies

Market Structure and Competition

• Analyzing the effects of market concentration on competition and consumer welfare
• The role of government regulation in promoting competitive markets
• Examining the relationship between market structure and innovation
• Assessing the impact of entry and exit barriers on market competition
• The effects of mergers and acquisitions on market competition
• Comparing the competitive strategies of firms in oligopolistic markets
• Analyzing the role of strategic alliances in enhancing market competitiveness
• The impact of globalization on market structure and competition
• Investigating the relationship between market structure and price discrimination
• The role of game theory in understanding competitive behavior in various market structures

Pricing Strategies

• Analyzing the effectiveness of dynamic pricing strategies in the digital age
• The role of price discrimination in maximizing profits for firms
• Examining the impact of psychological pricing on consumer behavior
• Assessing the effectiveness of promotional pricing strategies
• The role of cost-based pricing in determining optimal pricing strategies
• Analyzing the effects of competitor-based pricing on market competition
• Investigating the impact of regulatory policies on pricing strategies
• The role of consumer preferences in shaping pricing strategies
• Examining the effects of price wars on market competition and consumer welfare
• The impact of e-commerce on pricing strategies in traditional retail markets

Profit Maximization and Growth Strategies

• Analyzing the relationship between profit maximization and corporate social responsibility
• Examining the role of mergers and acquisitions in profit maximization and growth
• The impact of innovation on profit maximization and firm growth
• Assessing the effectiveness of market penetration strategies in maximizing profits
• The role of diversification strategies in driving firm growth
• Analyzing the impact of cost reduction strategies on profit maximization
• Investigating the role of organizational culture in profit maximization and growth
• Examining the impact of customer retention strategies on profit maximization
• The effects of globalization on profit maximization and firm growth strategies
• Analyzing the role of strategic alliances and partnerships in achieving growth and profit maximization

Risk Management and Decision Making

• Analyzing the role of risk assessment in managerial decision-making
• The impact of economic uncertainties on risk management strategies
• Examining the role of diversification in risk management
• Assessing the effectiveness of financial hedging strategies in managing risk
• The role of organizational culture in risk management and decision-making
• Analyzing the impact of regulatory policies on risk management strategies
• Investigating the role of scenario analysis in risk management and decision-making
• The relationship between risk management and corporate social responsibility
• Examining the role of real options in managing risk and making investment decisions
• The impact of digital transformation on risk management and decision-making

Government and Regulatory Policies

• Analyzing the impact of fiscal policies on managerial decision-making
• The role of monetary policy in shaping business strategies
• Examining the effects of trade policies on managerial economics
• Assessing the impact of environmental regulations on business strategies and competitiveness
• The role of antitrust policies in promoting competition and consumer welfare
• Analyzing the impact of tax policies on business decisions and profitability
• Investigating the role of government subsidies and incentives in shaping business strategies
• The relationship between regulatory policies and innovation in various industries
• Examining the impact of corporate governance regulations on managerial decision-making
• The role of government policies in promoting sustainable business practices

Business Ethics and Corporate Social Responsibility

• Analyzing the impact of ethical decision-making on business performance
• The role of corporate social responsibility in enhancing firm reputation and profitability
• Examining the relationship between business ethics and consumer behavior
• Assessing the impact of ethical leadership on organizational culture and performance
• The role of corporate social responsibility in addressing environmental challenges
• Analyzing the relationship between business ethics and regulatory compliance
• Investigating the impact of corporate social responsibility on employee engagement and retention
• The role of ethical considerations in shaping business strategies
• Examining the impact of corporate social responsibility on stakeholder relations
• The relationship between business ethics and corporate governance

International Business and Globalization

• Analyzing the impact of globalization on managerial decision-making
• The role of international trade policies in shaping business strategies
• Examining the challenges of managing multinational corporations
• Assessing the impact of cultural differences on managerial decision-making and performance
• The role of global supply chains in enhancing competitiveness and efficiency
• Analyzing the impact of exchange rate fluctuations on international business decisions
• Investigating the role of foreign direct investment in promoting economic growth and development
• The relationship between international business and corporate social responsibility
• Examining the impact of regional trade agreements on international business strategies
• The role of emerging markets in shaping the global business landscape

Technological Innovations and Digital Transformation

• Analyzing the impact of digital transformation on managerial decision-making
• The role of big data analytics in enhancing business performance and competitiveness
• Examining the challenges and opportunities of adopting artificial intelligence in business operations
• Assessing the impact of e-commerce on traditional retail markets
• The role of cybersecurity in protecting businesses and consumers in the digital age
• Analyzing the impact of blockchain technology on various industries
• Investigating the role of the Internet of Things (IoT) in transforming business operations and strategies
• The relationship between technological innovations and sustainable business practices
• Examining the impact of automation and robotics on employment and productivity
• The role of digital marketing strategies in enhancing customer engagement and retention

In conclusion, selecting an engaging and relevant research topic is a critical step in writing a successful research paper in managerial economics. The comprehensive list of topics presented above, divided into ten categories, is designed to inspire you to delve into various aspects of managerial economics, allowing you to find a topic that aligns with your interests and academic goals. By exploring these managerial economics research paper topics, you can develop a solid foundation for your research and contribute to the ongoing development of knowledge in this vital field.

How to Choose a Managerial Economics Topic

With numerous managerial economics research paper topics to choose from, selecting the perfect topic for your managerial economics research paper might seem overwhelming. The following expert advice will guide you through the process of narrowing down the list of potential topics and selecting the one that best fits your interests and goals.

• Relevance and significance : Ensure that the topic you choose is relevant to the field of managerial economics and has the potential to make a meaningful contribution to the existing body of knowledge. A significant topic can capture the interest of your audience, including your instructors and peers, and demonstrate your understanding of current issues in the field.
• Personal interest and passion : Select a topic that genuinely interests you and ignites your passion. Writing a research paper is a time-consuming process, and staying motivated is easier when you are enthusiastic about the subject matter.
• Data availability : Before finalizing your topic, research the availability of data and resources that you will need to conduct your study. Choose a topic for which sufficient data and information can be easily accessed through reliable sources, such as academic journals, books, and reputable websites.
• Scope and feasibility : Consider the scope of your research paper and ensure that it is manageable within the given timeframe and word limit. A topic that is too broad may be difficult to cover thoroughly, while a topic that is too narrow may lack sufficient content for a comprehensive research paper.
• Academic contribution : Aim to select a topic that adds value to the existing literature on managerial economics. This may involve addressing a gap in the literature, challenging existing theories, or providing new insights into a specific area of research.

How to Write a Managerial Economics Research Paper

Writing a high-quality research paper in managerial economics requires a combination of in-depth knowledge, thorough research, and strong writing skills. The following tips will help you navigate the writing process and produce an exceptional research paper.

• Structure : A well-structured research paper includes an introduction, literature review, methodology, results, discussion, and conclusion. Begin with an engaging introduction that outlines your research question and provides context for your study. The literature review should offer a comprehensive overview of existing research relevant to your topic, while the methodology section should detail the research design, data sources, and analytical techniques used in your study. Present your results clearly and concisely, followed by a discussion that interprets your findings and relates them to the existing literature. Conclude your paper by summarizing your main findings, highlighting their significance, and suggesting areas for future research.
• Conducting research : Use a variety of sources, including academic journals, books, and reputable websites, to gather information and data for your research paper. Ensure that your sources are reliable and up-to-date, and avoid relying solely on a single source or type of source. As you conduct your research, take detailed notes and keep track of your sources for easy reference during the writing process.
• Organization and coherence : Organize your research paper logically, ensuring that each section flows seamlessly into the next. Use clear headings and subheadings to guide your reader through the paper, and avoid including irrelevant or redundant information. Make sure that your arguments are well-supported by evidence and that your conclusions are drawn directly from your findings.
• Citation and academic integrity : Cite your sources accurately and consistently, using the citation style required by your instructor (e.g., APA, MLA, Chicago/Turabian, Harvard). Maintain academic integrity by giving proper credit to the authors whose work you have referenced and avoiding plagiarism.
• Revision and proofreading : After completing your research paper, take the time to revise and proofread it carefully. Check for clarity, coherence, and organization, as well as grammar, spelling, and punctuation errors. Revision may involve reorganizing sections, adding or removing content, or rephrasing sentences to improve clarity and readability. Proofreading is essential to ensure that your research paper is polished, professional, and free of errors. It can be helpful to have a friend or peer review your paper and provide feedback, as they may notice issues that you may have overlooked.

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ESSAYS IN MANAGERIAL ECONOMICS

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Managerial Economics

Introduction.

Demand and supply of goods may be affected with the consideration of price fluctuations. If the goods are competing for the market, the changes in the demand and/or supply of either commodity will depend on the management decisions made by producers, with respect to countering the competition edge introduced by a competitor. Demand in one commodity also depends on effect one good over the other; are the goods complementary or substitutes? Considering the case of substitute goods, where technological advances are a factor that creates a difference in the two goods, customer indifference to the two competing goods will depend on the prices that the two competitors are willing to offer on market, and hence the choice of the customer between the two goods.

What would happen to the supply of pens?

The supply of pens will depend on the producers of the pen. If we consider the two, that is, pencil and pens are perfect substitutes; the technological breakthrough in the production of pens, the cost of production of pens comes low. Every business aims at minimizing costs while maximizing revenues. If in the first case, and before the technological breakthrough in the production of pens, and considering the prices of the two were fairly different, the consumer’s choice between pens and pencils was directed by a reduction of prices of the pens or pencils. The present case has given the producer of pens an opportunity to produce at lower costs; therefore, reduction in the prices of pens is inevitable. The total end effect is on the supply; since many pens can be produced per unit cost in comparison to the previously produced there will be mass production of the pens in anticipation of high demand. Demand and supply have a relationship that an increase in supply causes a drop-in-prices hence prices will also come down. In a nutshell we, expect the supply of pens to rise.

What would happen to the price of pens and the quantity demanded for both pens and pencils?

The price of the pens will drop. The factor that mostly dictates the end price of a commodity is the cost of manufacturing of the given good, if demand of the good is assumed to be constant. In the case of the pens above, technological breakthrough has enabled the producer to lower the cost of production, and mentioned above, if the cost of production of a pen has come down, the expected effect is that the prices of the pens will come down as a result of low production costs.

With respect to the demand of the two, banking on the assumption that there is no technological advance in the production of pencils, and that the pen remains a perfect substitute for the pencil, the quantity demanded for pens will increase with respect to the perceived reduction in the prices of the pens, as shown in the figure below.

The relationship shows that a decrease in prices causes an increase in the quantity demanded over a given period of time (Adil, Janeen.R. 2006),.

On the contrary, the quantity of the pencils demanded will be reduced drastically since the pencil will be totally replaced by the pens in the market. On the other hand, any fluctuation in the demand of pencils will depend on the manufacturers of the pencils. If they deem it proper that they maintain a fair cost of input and lower the cost of a pencil then they can still have their pencil demand retained. However, as expected, the pencil demand will be reduced while the demand of pens will increase sharply due to the reduced costs of producing a pen. Thus, a price war will be realized in between the manufacturers of pens and pencils. The dictator of the prices will be the pen producer since he has an advantage owing to the lowered cost of producing a pen.

The pencil manufacturer will consider price change as a response to the lowered prices of pens. Besides, it is not clear if the technological advance in the production led to the finding of cheap raw materials to produce pens or the technology involved a reduction in the cost of production without affecting the quality of a pen, that is, causing an improve in the quality of the pen. It there was no change in the quality of the pen produced, the great determinant to the quantity supplied and price will depend on the satisfaction derived by the customer in the consumption of either a pen or a pencil. In this case, we assume that the technological advances in the production of the pen not only led to the lowering of the cost of production of the pen but it also led to the improvement in quality of the pen. If this is the case, price effect will be that both will drop, but the pen producer has an upper hand to drop process lower than the manufacturer of pencils while still maintaining a profitable advantage to command and dictate the market, thus supplying more pens as opposed to the producer of pencils.

How managers for pen-makers and pencil-makers decide given the above answers?

The managers of the two manufacturing companies have opposite decisions in order to remain competitive in the market. In the given situation, the manager of the pens has had a breakthrough in the technology leading to the lowering of the prices of the pens. Mankiw, N Gregory, 2009. His market response will be to reduce the prices of the pens in order to sell more of them. This can be done with the view of the pencil manager. If the pencil manager responds by lowering also prices, the level to which the pen manager lowers his prices depends on the level to which the pencil manager counters. The pen manager can make sure that he keeps the prices fairly lower than those set by the pencil manager with a fact in mind he has a competitive advantage over the other.

On the other hand, the expected response that the pencil manager is more likely to do is to cut his prices in order to compete favorably. However, knowing that he doesn’t have a competitive edge over the pen manufacturer. The best decision the pencil manufacturer is likely to take is to wage an intensive marketing strategy in order to keep his pencil demand fairly higher. Combined with the slight reduction in the prices of pencils, he will consider not using price reduction as an entire strategy to keep his demand up but also marketing as a strategy. Besides, another strategy will be to copy the technology used by the pen manufacturers and introduce a pen production name under its brand in order to reduce the substitution effect of the pen as opposed to the pencil which is more likely to drive them out of business.

In the situation presented above, the technological breakthrough gives an upper hand to the manufacturer of pens. Besides, the manufacturer of pencils also has an opportunity to counter that if he can adopt price reducing strategy and adoption of pen production line to counter the effects of the pen manufacturer.

Works Cited

Adil, Janeen. Supply and demand . Minnesota: Capstone press. 2006.

Mankiw, N Gregory, 2009. Principles of micro-economics . Mason: Cengage learning. 2009.

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Essay on Managerial Economics

This essay provides a note on managerial economics:- 1. Introduction to Managerial Economics 2. Principles of Managerial Economics 3. Techniques.

Essay # Introduction to Managerial Economics:

Business Management and Economics have always been closely related; in fact, most schools of business have their origins in departments of economics. Yet, the viewpoints of the economist and the manager have, until recently, been different. The economist has been concerned chiefly with the functioning of the economy as a whole and social issues such as monopoly and competition, tax policy, the pricing system, and the distribu­tion of income. The manager has been concerned primarily with maximization of profits, from the viewpoint of the individual firm, and with such company policies as pricing, wage payments, market share and employment of resources.

Both the economist and manager, nevertheless, face similar problems of using scarce resources in the satisfaction of human wants. Both concentrate on the analysis of demand characteristics and supply factors, but the manager must orient his thoughts to making decisions in business operations. Managerial Economics, therefore, may be defined as the management’s application of economic principles in the decision-making process.

Essay # Principles of Managerial Economics:

The four economic principles that managers should keep in mind daily are:

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(1) The Incremental Principle :

A decision is sound if it increases revenue more than costs or if it reduces costs more than revenue.

(2) The Principle of Time Perspective:

A decision should take into account both the short-run and long-run effects on revenue and costs, giving appropriate weight to the most relevant time period in each individual decision.

(3) The Opportunity Cost Principle :

Decision-making involves a careful measurement of the sacrifices required by the various alternatives.

(4) The Discounting Principle :

If a decision affects costs and revenues at future dates, it is necessary to discount these costs and revenues to present values before a valid comparison of alternatives is possible.

Essay # Techniques of Managerial Economics :

The manager should have knowledge of the following:

(1) Break-Even Analysis:

Revenue and cost can be studied by directing attention to total revenue and total cost. Breakeven analysis implies that at some point in the operations, total revenue equals total cost. Basically, breakeven analysis is concerned with finding the point at which revenues and costs agree exactly-hence the term BREAKEVEN (point).

The breakeven point is, therefore, the volume of output at which neither a profit is made nor a loss is incurred (Fig. 27.3).

The breakeven analysis can be carried out algebraically or graphically.

Breakeven analysis helps solving the following types of problems:

(a) What volume of sales will be necessary to cover:

(i) A reasonable return on capital employed;

(ii) Preference and ordinary dividends; and

(iii) Reserves.

(b) Computing costs and revenues for all possible volumes of output to fix budgeted sales.

(c) To find the price of an article to give the desired profit.

(d) To determine variable cost per unit.

(e) To compare a number of business enterprises by arranging their earnings in order of magnitude.

(2) Demand Analysis:

A schedule that shows the amounts that would be sold at various prices, in a given place, and on a given date.

Forces that determine the demand for a firm’s product include:

(a) The desires of the customers,

(b) The income of the customers,

(c) The prices of substitutes, and

(d) The characteristics of the market.

Any estimate of demand for a given product must be based upon estimates of expected national and international activity and estimates of the factors that effect the demand of the industry.

The manager is interested in demand because of the need to understand the external factors that affect decisions and policies.

Specifically, three subjects are important as background for price decisions:

(a) Elasticity of Demand:

Keeping in mind that demand is a schedule of price-quantities, the most important concept in demand analysis is elasticity. In general, elasticity may be defined as the percentage change in a dependent variable determined by a given percentage change in an independent variable.

Price elasticity of demand is the most common application of this concept. it describes the effect of a given percentage change in price (P) on the percentage change in quantities (Q) that would be purchased, i.e.

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