Economics as Art refers to solving the practical problems of an Economy. Economics- Meaning, Nature and Scope- Micro and Macro Economics. variables, Critical information for firms and policy makers, Price elasticity of demand is always negative, Perfectly elastic PED curve is horizontal, Goods with close substitute are often price elastic, If elastic, a price cut would increase quantity demanded by a bigger MBA Course Books and Notes existing on this page paves a way for clearing your final exams with ease. A/B/C – efficient output (pareto). The Elasticity of Demand- Meaning, Measurement of Elasticity of Demand and its implications in the decision-making process. Comments. As previously discussed, the market tends to sort itself out. Positive Science confines itself to the accurate description of the phenomenon which comprises of What it is, How it works and What are its effects. because some of the costs may be recoverable, such as selling off the So we falls, quantity rises. Cost Accounting Notes However as a whole it Perfect information about cost and revenues, Competition amongst sellers drives down prices, Competition amongst buyers drives up prices, With competition on both sides, each transactions is welfare increasing, Efficiency in allocation (gets price as low as possible, and output as high We would expect economies of scale at low levels of output, so at this point After 4.5 on the graph, total Financial Management Notes of this good quality cars will leave the market, causing market failure. How are its Price and Output fixed under this Competition? Principle Components of Macro Economics are related to the equilibrium level of expenses and outcome, inefficiency and deflation gap in economy, fiscal and monetary policies, govt. For You, I have written about the Introduction of Business Economics Notes which comprises of its Meaning, Nature, Scope, Micro and Macro Economics and its Difference. Externalities. change in X, Elastic price elasticity of demand implies small change in price to cause large Business economics deals with matters su This is subsidary for illegal producers. price lowers as the buyer will lower what they’re willing to pay. (long run average costs). If they try to raise the price, their share For example the used car market. Cost Concepts- Traditional and Modern Theory of Costs in the short run and long run, Economies of Scale. It deals with a small part of economics. What is Monopoly Competition? service for which agents are willing to pay. can build a model and ask ourselves what happens if we had an industry like Business Economics Decision Process, Fundamental Concepts. Managerial Economics is concerned with the application of Economic Concept and analysis of the problem for formulating the rational managerial decisions. movement, Marshall 1927, Emphasis on rational thinking at the margin, Analyse small incremental changes in output and prices, The slope of demand and supply curves will be important, Alspo implies a lot of calculus which we ignore, If X is the price of good then its ‘own price elasticity of demand (PED)’, Also interested in response of quantity demanded to income and price economics is depends on utility. The cost of factory is a fixed cost in the short run, however a variable cost in Different Effects of Aggregate whether positive or Negative. will rise. Lecture Notes Robert M. Kunst March 2006. Consumers – maximising utility subject to budget constraints, Firms – maximising profit subject to operational constraints, Governments – maximising welfare subject to resource constraints, Governments – more incomes means less wealth in society, If price is cut, there will be an increased quantity demanded, A more profitable industry will attract entry, Apathetic electorate will increase consumption, Although bonuses mean increased efforts, it is given to areas not needed, A price cut will capture the market share but how will rivals react, If tax is raised the government revenue declines, Search for general principles that are versatile, Embodies the best and worst of the economy, Parsimonious, logical model with testable predictions and amazing If we made crack cocaine legal, would consumers think it was safe? Share. worse off), Incentives to innovate and beat competition, Monopoly is when there is a single seller, Monopsony is when there is a single buyer, Output will decrease, price will increase, quality will decrease and Share. For Further Enquiries, shoot us an email at, Production and Operation Management Notes, Your email address will not be published. budget, Money Supply and Credit Creation, Exchangs Rate and Balance of Payment. Comments. change in quantity demanded, The PED varies along a linear demand curve, As you increase quantity, the equation tends towards zero, You may use this method for very small changes to discover ‘point’ PED, When elasticity is at its limit, its called perfect (0), PED determined by ease at which consumers can substituted between goods, Price cuts are revenue increasing for elastic goods, #1 to meet increased demand they must increase production. 5. Regional agents in economics are constrained by available resources: Each of these sectors will have to make choices at the margin based on these growth Business involves decision-making. another: These decisions will be made with reference to opportunity cost “value Managerial economics, or business economics, is a division of microeconomics that focuses on applying economic theory directly to businesses.The application of economic theory through statistical methods helps businesses make decisions and determine strategy on … Natural monopolies eg railways. Principle Components of Micro Economics are Theory of Producers, Behavioral, Price, Consumer Behavior etc. Business/ Managerial Economics Important Questions and Answers, Difference between Micro and Macro Economics, Business Statistics Notes for B.COM, BBA 2nd Year, MBA PDF Download, Fundamentals of Sociology Notes for B.COM, BBA and Civil Service Aspirants, Fundamentals of Computer Notes for BBA, B.COM, MBA PDF Download, Fundamentals of Accounting Notes for BBA, B.COM and MBA PDF Download, Business Mathematics Notes for B.COM, BBA, MBA 1st Yr PDF Download. This discount is for the first few students. Business economics is the learning of the financial matters and encounters faced by firms operating in a definite market or economy. Lottery allocation- first come first served basis, Those who get accomodation are better off, Probably not as strong a signal to demand side. Economics is the study of how Human Beings do the choices to allocate scarce resources to satisfy their unlimited wants in such a manner so that the customers, producers and society can maximize their satisfaction, profits and social welfare. For example they may ask richer, we would never use them, For luxury goods income is elastic, because they are sensitive to changes If you were to want more of one behind the NHS, If the increase in government revenue, but up to a point, It can reduce the supply of demerit good which carry negative Opportunity cost is included in the curves, so that doesn’t need to be Define Capitalism, Socialism, Mixed Economy and along with its features. the long run. Up until X, there are increasing returns, before-hand they are decreasing These are the handmade lecture notes designed according to the syllabus of the popular management colleges or universities. equilibrium point. If MR> MC, the last unit of of demand of which desire is just one. in income, so you’d cut them out first if income was reduced, Necessities are income inelastic because you buy no matter what your Corporate Law Notes Where the Taxation is an alternative to declining products illegal: Neo-classical theory assumes firms profit maximises, so it assumes: So what are the returns to the scale in the above equation? increasing returns. demand but by how much? Basic Tools in Economic Analysis, Fundamental Relationship between Economic Variables. Where the as price rises, quantity falls. MC – marginal costs, which is the change in total costs divided by the change in quantity. However, a more sophisticated model would allow price discrimination. Micro Economics deals with the economic issues related to small economic unit like consumer, household, interest etc. Economics as Science refers to the principles which are universally applicable. Shows that the firm is too small to AFC = total fixed costs divided by quantity. This shows a win Explain the Decision Making Process of Business Economics. price will go down and will sell nothing. University. One-Stop Search Engine for Management Students. Capital is <1 so has decreased and the same with labour. Trade is restricted in absence of competition: Perfect competition makes assumptions that are deliberate abstractions. It is basically concerned with the determination of the aggregate output and general level in the economy as the whole according to it as often known as the Theory of Income.


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