Managerial Economics - Video Notes

Flashcards covering key concepts from the managerial economics video notes.

Managerial Economics

Aims to draw attention to major decision problems and apply economic analysis to support optimal managerial decisions.

Profit Analysis

The measurement of earnings after explicit and implicit costs are accounted for; profit reflects revenue minus costs.

Economic Intelligence

Monitoring competitors, assessing market positions, and identifying potential threats to the business.

Demand Analysis

Analysis of market demand for a product to guide decisions on production, pricing, and cost allocation.

Long-Term Planning

Projection of revenues, expenses, and key financial factors over an extended horizon.

Mathematical Economics

Use of mathematics to build models, perform quantitative experiments, and predict economic growth.

Theories of the Firm

Microeconomic framework describing how firms operate in markets to maximize profits via supply and demand.

Profit Maximization

The principle that a firm should operate to maximize profit, typically by increasing revenue and/or reducing costs.

Profit

Financial gain; the difference between revenue and costs (explicit and implicit).

Income

Net earnings after subtracting all expenses incurred by the business.

Application of Managerial Economics

All companies apply managerial economics to guide decision making and strategic choices.