Zalal Bakti

023202005014

Managerial Economy

MBA in Tech Batch 4

What you learn?

I learn about the economic problem , wich is in the economic problem there are 3 key term
such as Needs , wants and resources. Needs (something something essential to survival – for example
food, water), wants (something you would like to have, but is not essential to survival for example
cars), resources (something used to produce output). Resources can be divided into four groups are
Labor,Capital,Land and Enterprise. Also learned why monopoly is bad such as High prices, firm with
monopoly power can charge higher prices because the consumers have no choice. Poor quality so the
firm has no incentive to improve the quality of its product or service. And why monopoly can be
good because, research and development means which it can put back into the firm to research and
develop new products and methods of production, which will benefit the consumer in the long run,
International competitiveness able to build up advantages that will help it in international markets
and the last exploitation of economies of scale it is able to benefit from its large size and so costs fall.
If average costs fall, the firm can choose either to reduce prices.

Price elasticity of demand is very important for firms when they are making pricing decisions. It
helps them decide what to do with price if they want to increase total revenue. PED measures the
responsiveness of the quantity demanded to a change in the price of a good. This means that we look
at how much the price has changed by, and what this has done to quantity demand.

Supply is the quantity a producer is willing and able to produce at a given price in a given period of
time.Demand is the quantity a buyer is willing and able to buy at a given price in a given period of
time.Effective demand – for demand to be effective a consumer must be both willing and able to buy
the good or service.

What You Can Implement at Your Company

It is very important to know the priority between wants and needs both in making company equipment
purchasing decisions, also I can analyze the market demand in my company using the Elastic or
Inelastic Graph.

Comments About the Session

Interesting explanation I got new knowledge about the Demand curve and monopolyadventage for the
company.