Indifference Curve Analysis
Indifference curve analysis is basically an attempt to improve cardinal utility analysis (principle of marginal utility). The cardinal utility approach, though very useful in studying elementary consumer behavior, is criticized […]
Law of Diminishing Marginal Utility
“Other things remaining the same when a person takes successive units of a commodity, the marginal utility diminishes constantly”. The marginal utility of a commodity diminishes at the consumer gets […]
Equi Marginal Principal
The Law of Equi-Marginal Utility is an extension to the law of diminishing marginal utility. The principle of equi-marginal utility explains the behavior of a consumer in distributing his limited […]
Cardinal and Ordinal Approaches to Consumer Behaviour
The utility is a psychological phenomenon; that implies the satisfying power of a good or service. It differs from person to person, as it depends on a person’s mental attitude. […]
Incremental Concept
The incremental concept is closely related to the marginal costs and marginal revenues of economic theory. Incremental concept in managerial economics involves two important activities which are as follows: Estimating the impact of decision […]
Production Possibility Curve
The production possibility curve represents graphically alternative production possibilities open to an economy. The productive resources of the community can be used for the production of various alternative goods. But […]
Opportunity cost Principle
Opportunity costs are cash outflows prevented by taking one course of action instead of another. They include returns, which the entrepreneur could have earned in alternative use of his services […]
Role of Managerial Economics in Decision Making
Business firms are a combination of manpower, financial, and physical resources which help in making managerial decisions. Societies can be classified into two main categories − production and consumption. Firms […]
Managerial Economics and relationship with other Disciplines
Many new subjects have evolved in recent years due to the interaction among basic disciplines. While there are many such new subjects in natural and social sciences, managerial economics can […]