Activities for Module 4, 5, and 6

BACC1 Managerial Economics

Reflection

Module 4:

It is important to understand their relationship to be able to know whether its alright to produce
more products to the market or it will be a loss. Knowing their relationship will make it easier for
the business owners to also know whether they are earning money enough to with produce more,
stop the production, or maintain. This helps them to avoid investing too much money which
means acquiring more expenses.
In short, if the average cost is less than the average revenue, it is fine for the business to produce
more which will come in the marginal production. If the average cost is greater than the average
revenue, on the other hand, it is not advisable for the business to produce more because it
technically means that they might experience bankruptcy sooner or later.
Lastly, if the average cost is the same amount with the average revenue, it is alright for the
business to maintain their production.

Module 5:

I personally do not think that the perfect competition exists. Business owners nowadays aim for
uniqueness. They aim to sell something that is unlike other existing products to have lesser
competition and therefore get most of the customers.
As for being in a monopolistic set-up, I agree that they have more benefits than disadvantages.
This type of set up allows the competitors to sell different products. The monopolistic set up
allows the sellers to have some control to their pricing for the number of competitors are lesser
compared to the perfect set-up.
If I were to chooses between the 4 market situations, I think it would be the monopolistic or
imperfect competition because even if there are many competition, they all have differences in
their products which makes them have the best pricing strategy. I chose the monopolistic
competition because if it compared to a perfect competition where there are lots of sellers in the
market and have very little differences, they always aim to increase their sizing while having a
low pricing.
Module 6:
 Activities for Module 4, 5, and 6
BACC1 Managerial Economics

For me, yes, you can be efficient but not effective and be effective but not efficient. Being
effective means that the desired results are met, even if the process is long and there are many
trials and errors.
Being efficient on the other hand, means that the process is fast and is the expensive way but that
does not mean that it will be 100% effective. It will always be a 50/50 process if you are not both
efficient and effective. That is why efficiency is at its best when complemented with
effectiveness.