Can someone please provide a feedback to this discussion post on a managerial ec
ID: 1166857 • Letter: C
Question
Can someone please provide a feedback to this discussion post on a managerial economic class. Thanks
The main idea of managerial economics is for the managers to determine how to maximize profits within the parameters of the number of resources available. Managers need to look internally, determining what the ultimate goals of the firm are, such as customer and worker satisfaction or controlling market share vice increasing profits and shareholders' wealth. Other internal factors include costs associated with production, the firm's capabilities, and technology. These factors could determine if larger profits can be made through outsourcing certain types or amounts of work. There is also the factor in determining the firm's short- and long-term profit goals, and which alternative is the better choice (Rekhi, 2016).
Managers need to also look at the outside influences and environment to determine the best ways to increase profits. Some factors include trends in the market and the overall economy, market share, determining customer base and focus, potential for future growth, regulations, supply and demand, and risk versus gain. Something that managers need to get away from is sacrificing, or the just doing the bare minimum to maintain the status quo of profits and long-term integrity of a firm without putting too much at risk. A possible cure for this is leveraging stock incentives since this should align the firm's and manager's goals.
~ Graham
Reference:
Rekhi, S. (2016, May 16). How to Maximize the Value of a Firm in Managerial Economics? Retrieved July 10,
2018, from http://www.economicsdiscussion.net/managerial-economics/how-to-maximize-the-value-of-
a-firm-in-managerial-economics/20640
Explanation / Answer
The concept of managerial economics presented in this discussin best explains the centeral idea of managerial economics. But this discussion gives too much importance to the ''profit maximazation'' defnition of manegrial economics, which is the old concept. Manegrial economics also deals with manegrial utilities, grouth of the firms capital and sales maximization is also a goal of modern firms which is covered by managerial economics etc. All of these policy varables has not direct link with profit maximization.
If these points get added in above discussion it may became good discussion post on manegrial economics.