perspective of the economy as a whole ( macro in nature). 6. It helps to find optimal solution to the business problems (problem solving). Managerial Economics.
directs all economic activity and takes the full risks, and is the sole proprietor. b) Partnership: In partnership firm, two, three or more people join together.
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Managerial Economics full notes pondiuni pdf. Managerial economics is a stream of management studies which emphasises solving business problems and.
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From Managerial Economics
TP (Total Product) is total output produced. AP (Average Product) is output per unit of variable input (AP = TP/L). MP (Marginal Product) is additional output from one more unit of variable input (MP = ΔTP/ΔL).
Relationship: When MP > AP, AP rises; when MP < AP, AP falls; MP intersects AP at AP's maximum point.
These relationships explain the stages of the law of variable proportions.
NPV vs IRR (any three):
Both consider TVM.
Managerial economics is a stream of management studies which emphasises solving business problems and decision-making by applying the theories and principles of microeconomics and macroeconomics. It is a specialised stream dealing with the organisation's internal issues by using various economic theories.
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Law of variable proportions (short-run) explains output behaviour when one factor is fixed and the other is variable. When more units of a variable factor (labour) are applied to a fixed factor (plant), total output changes in three stages.
Stage I: Increasing returns
Stage II: Diminishing returns (rational stage)
Stage III: Negative returns
Managerial significance:
Thus, the law guides input decisions and cost control.