Join Stefan Michel for an in-depth discussion in this video Summary, part of Managerial Economics.
- In this course, you have learned how to make…better decisions using managerial economics.…It is really important that you frame each decision…systematically, by including these five elements.…First, we need to define what decisions we want to take.…Second, we have to clearly outline…at least two choices or alternatives.…Third, we need to define a measurable objective.…Fourth, we have to define a small set of variables…that we are going to use for our analysis.…
Finally, we need to have a theory of how…the different variables are related.…In the beginning, you probably need a cheat sheet…to remember all five steps,…but afterwhile , it becomes second nature,…and that's where the fun and the success begin.…To learn more about managerial economics,…visit my page at IMD.org, or my website,…and look for the managerial economics link.…Please also follow me on Twitter,…where I share more on this topic and others.…If you'd like to learn more about pricing,…please watch my Value-Based Pricing course on this site.…
Thank you for joining me for this course.…
- What are customers buying? (demand theory)
- What should we produce? (production theory)
- Which costs do I need to worry about now? (cost theory)
- What market am I in? (competition theory)
- What should we charge for it? (pricing theory)
To understand what managerial economics looks like in practice, Stefan explains how Google's auction-based advertising system employs the principles of game theory and how understanding this can help decision makers to outmaneuver their competitors.
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- Using economics to solve business problems
- Understanding price elasticity
- Demand curve shifts
- Economics of scale vs. scope
- Break-even and what-if analysis
- Profit maximization
- Economics in action