Application of Managerial

Economics

1. Decision regarding the price:

"Decision regarding the price" under the application of managerial economics refers to
the process of determining the optimal price for a product or service that a business
offers in the market. This decision involves analyzing various factors to set a price that
maximizes revenue, profit, and overall market performance. Here's a closer look at this
application:

Detailed Overview

2. Forecasting the estimation and demand of the demand for the product or the
service: Forecasting the demand for a product or service is a critical aspect of
managerial economics. It involves estimating the future demand for a product or
service based on various factors, data, and analytical techniques. Accurate demand
forecasting helps businesses make informed decisions about production, inventory
management, pricing, and resource allocation.

Detailed Overview

3. Choices relating to techniques of production:

Choices relating to techniques of production refer to the decisions businesses make

regarding the methods and processes they use to produce goods or services. These
choices impact factors such as efficiency, cost, quality, and resource utilization.
Businesses must carefully consider these decisions to optimize production and achieve
their objectives.

Detailed Overview

Application of Managerial Economics 1

 4. Advertising Expenditure: Advertising expenditure refers to the amount of money
that a business or organization spends on promotional activities to create
awareness, build brand recognition, and persuade potential customers to purchase
its products or services. Advertising is a crucial component of a company's
marketing strategy and plays a significant role in influencing consumer behavior.

Detailed Overview

5. Decisions relating to investment: Decisions relating to investment in the

application of managerial economics involve strategically allocating financial
resources to maximize business growth, profitability, and overall performance.
These decisions encompass a range of choices, from investing in new projects to
optimizing existing operations.

Detailed Overview

Application of Managerial Economics 2