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Managerial Economics

Why marginal analysis is so important in managerial economics? Give examples of how this type of analysis can help a managerial decision maker. What are some limitations to using marginal analysis?

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The response addresses the queries posted in 699 words with references.

//Before writing about the importance of Marginal Analysis, we have to understand the branch of managerial economics and its importance for an Organization. Then, we will discuss about the importance of marginal analysis in managerial economics. With the assistance of this, we will become able in understanding the application of the principles of economics in business decision making.//

Managerial Economics

Managerial Economics is a branch of economics. With the help of this branch, we can apply Economics in decision making. Managerial Economics bridges the gap between economic principles/ theory and managerial practice. To take a specific decision, this branch applies micro economic analysis. We can apply the principles of Economics in taking decisions related to some problems like scale of operation, quantum of resources to be employed, marketing etc.

Because of the scarcity of the resources it is not possible to have whatever we want. To get the better value from limited resources it is essential to evaluate the difference between the total cost and the total benefits of any activity. To ...

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