Answer to Question #236524 in Microeconomics for Arafat

Question

Identify a set of concepts in Managerial Economics that you found most interesting and useful. Show why these sets of concepts impressed you with a case study?

NOTE: Your case study has to identify WHY you liked the set of concepts; AND then compare it with other related concepts. 

Answer 1

The incremental concept

This concept describes incremental reasoning. It involves estimating the impact of decision alternatives on costs and revenues. It increases revenues more than it increases cost.

Suppose, the additional cost of producing one ex­tra unit of output is $10 and the additional revenue from this extra unit is rs. 15.a 5-unit increase in output increases total cost by say $45 \ increases revenue by $70.