Part I

The Nature of Managerial Economics

9781118412060-pp0101.eps

In this part . . .

Economics studies how people allocate scarce resources to satisfy as many of their wants and desires as possible. By trying to make a profit, businesses turn the scarce resources into the goods that satisfy those wants and desires. Businesses that make lots of profit are providing the goods and services that people value the most. In this part, I establish the foundation for business decision-making that simultaneously satisfies consumer wants and desires while generating maximum profit. I describe how markets work and the determination of a good’s price through demand and supply. I examine how the quantity of a good consumers purchase responds to changes in price and other factors such as income. This part also includes a calculus review — an important tool businesses use to minimize costs and maximize profit.

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