ACTIVITY #1
1. Why there is a demand in Managerial Economics?
• According to Mansfield, managerial economics is concerned
with the application of economic concepts and economic
analysis to the problems of formulating rational managerial
decisions. One of the economic analysis is the demand analysis
and theory of demand is one of the concepts of managerial
economics. In our economy, demand is a significant aspect that
entrepreneur and businessmen look at in order to sustain and
manage well our economy. Demand impacts the prices of goods
and services within the economy. If there is a high demand for
shoes then the sellers will be able to increase its prices and vice
versa. Knowing the demand of the consumers within the
economy would be a great help in making accurate managerial
decisions for the betterment of the economy that is why demand
is a big part of managerial economics.
2. What is the role of demand in Managerial Economics?
•Demand plays a vital role in managerial economics. Demand is
when somebody wants a certain goods and he has the means to
pay or acquire it for the price that the seller is selling it.
Demand analysis helps the economy since this process is use for
understanding the demand of the customers for a product or
service then after determining it, the managers apply the
demand function to make the supply of products or services in
order to have a profitable economic. This analysis helps firms to
make an accurate decisions. While the demand function is to
estimate the demand for a certain product or its quantity to sell
in the market with saturating it. Here is an example that will
show the signifant role of demand in managerial economics, a
restaurant made a survey form for their customers, when the
manager checked it, it shows that 80% of the customers will not
recommend and will not return to the restaurant due to they do
not want to pay 50 pesos for parking space of their vehicles. The
demand and function was recognized by the manager that is
why he reported it in the executives and they make a decision.
The restaurant made their parking space for free so that the
customers will returrn to them and recommend them that would
bring more income to the restaurant.
