Managerial Economics: Taking Care of Business
In This Chapter
Placing managerial economics in a broader context
Understanding business management
Recognizing opportunity cost
Developing goals while recognizing constraints
Knowing the competition
Determining the time value of money
American humorist Frank McKinney Hubbard said, “Lots of folks confuse bad management with destiny.” Managerial economics ensures a destiny that includes success for your business. And success has to be earned given that businesses compete for scarce resources.
The basic economic problem — scarcity of resources versus virtually unlimited human wants and desires — requires all societies to determine how to allocate scarce resources among competing uses. However, different methods are used to determine this resource allocation with the most common methods involving markets, government, or some combination ...