Managerial Economics
principles
of
They are:
1. The Incremental Concept
2. The Concept of Time Perspective
3. The Opportunity Cost Concept
4. The Discounting Concept
5. The Equi-marginal Concept
6. Risk and Uncertainty
2. Concept of TimePerspective:
The time perspective concept states
that the decision maker must give
due consideration both to the short
run and long run effects of his
decisions.
He must give due emphasis to the
various time periods. It was Marshall
who introduced time element in
economic theory.
4.Equi-Marginal Concept:
The principle states that an input
should be allocated so that value
added by the last unit is the same in
all cases. This generalisation is
popularly called the equi-marginal.
5. Discounting Concept:
Suppose, you are offered a choice of
Rs. 1,000 today or Rs. 1,000 next
year. Naturally, you will select Rs.
1,000 today. That is true because
future is uncertain.
Let us assume you can earn 10 per
cent interest during a year.