Ques.3. The supply curve of the monopolist is indeterminate. Discuss.

Market control means that monopoly does not have a supply relation between the quantity of output produced and the price. In contrast, the short-run supply curve a perfectly competitive is that portion of its marginal cost curve that lies above the minimum of the average variable cost curve. However, because monopoly does not set price equal to marginal revenue, it does NOT equate marginal cost and price. For this reason, a monopoly firm does not respond to price changes by moving along its marginal cost curve. A monopoly does not necessarily supply larger quantities at higher prices or smaller quantities at lower prices.

Ques.1 “Managerial Economics is the integration of economic theory with business practice for the purpose of facilitating decision – making and forward planning by manager”. Explain and comment.

                  Managerial economics is a science that deals with the application of various economic theories, principles, concepts and techniques to business management in order to solve business and management problems. It deals with the practical application of economic theory and methodology to decision-making problems faced by private, public and non-profit making organizations.

The same idea has been expressed by Spencer and Seigelman in the following words. “Managerial Economics is the integration of economic theory with business practice for the purpose of facilitating decision making and forward planning by the management” .According to Mc Nair and Meriam, “Managerial economics is the use of economic modes of thought to analyze business situation”. Brighman and Pappas define managerial economics as,” the application of economic theory and methodology to business administration practice”.Joel dean is of the opinion that use of economic analysis in formulating business and management policies is known as managerial economics.