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    Managerial Economics

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    Eaton Corp. (Industrial Equipment).

    Base on the company information please provide answer to the following questions
    1. During the job interview, the Vice President understood that you had received rigorous training in managerial economics, and you were able to select some appropriate methods to forecast the market movement. Thus, he is very interested to see some quantitative analysis based on the company's previous market reports and other relevant factors (for instance, macroeconomics factors).

    2. However, most member of the Board of Directors only have some basic training in economics. So you should explain your results intuitively and use the language so that people with only intro level economics can easily follow.

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    Solution Preview

    The response address the queries posted in 913 words with references.

    // This paper discusses the application of forecasting in gauging market movement. But before beginning the paper; it is essential to understand the concept of 'Managerial Economics' and its application in various areas of corporate decision making. Like this.//
    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. It can also be applied in planning and control of the business.
    Forecasting is an important area where Managerial Economics can be used. Forecasting is the prediction about the future. When we use the existing data and facts to estimate the current and future market trends, it is known as forecasting. Many business decisions regarding the raw material, scale of output, marketing network depend on sales/demand forecasting. Success of the business depends on proper and correct decision making. By using Managerial Economics in predicting the future, we can take the right decision and ensure the success of business.

    //Moving on, now, we will take the case of Eaton Corporation and the application of forecasting in predicting demand of its product.//
    For the ...

    Solution Summary

    The response address the queries posted in 913 words with references.