describing the diverse tools that managerial economics uses to derive optimal so

Question

describing the diverse tools that managerial economics uses to derive optimal solutions, i.e., explain, using a variety of examples, the main tools of economic theory (the theory of markets, the role of prices, and the drive to profit maximization). Then express your views on the following questions:

Are these concepts, tools and methodologies universal? That is, do they apply to any institutions? For example, do they apply to the military? Or to City Hall? If not, should they?

Can a company that operates in the market afford to be inefficient (i.e., to waste resources)? For how long? What about the military? Or City Hall? That is, what are the forces and incentives that, in your opinion, are present in the market and absent in the military and in City Hall?

Explanation / Answer

The economics concepts, tools and methodology are not universal for different institution. The purpose of each institution is different hnec the economics of each institution is different.

Like normal market will be affected by demand, supply and price level of any commodity or service whereas the same will not work for a militany unit or city hall. As these institution do not work based upon profit motive. Since heir motives are different than profit, their economic mottos are different. Their objective is safety and welfare of our country rather than their own personal growth and profit.

A company can other afford to water resources. If it does, it will increase cost of production and reduce the profit. The long run profits may be sustained if the wastage is a short term issue. Military or city halls can not afford to waste resources as they have scar its of resources and waste may lead to a big problem, in short and long run both.

The incentives are mentioned below in a free market scenario:

Marketable permit system, free entry and exit

Emissions taxes, fees and charges

Subsidies

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