Fundamental Concepts Used For Decision Making or Managerial Decision Making
Fundamental Concepts Used In Managerial Economics OR Fundamental Concepts Used For Decision Making or Managerial Decision Making Five fundamental concepts that are basic in a study of managerial economics are as follows (i) Incremental concept (ii) The concept of time perspective (iii) The discounting principle (iv) The concept of opportunity cost and (v) The concept of equi-marginalism. (I) Incremental Concept Incremental concept is closely related to the Marginal revenues (MR) and Marginal costs (MC) of economic theory. Incremental reasoning involves estimates of an impact of decision alternatives on costs and revenues, stressing the changes in total costs and total revenue that result from changes in prices, products, procedures, investments or whatever may be at stake in the investment decision. The two basic concepts involved in this analysis a...