Improving Business Decisions
Learning Team C Week 6 Reflection
“Improving Business Decisions” was the focus of week six. The objective of the week was to: apply economic concepts in making business decisions. We will discuss topics we felt comfortable with and struggled with during the class discussions. We will also relate the objective to our current line of work.
Topics we felt comfortable with.
We felt comfortable with the one objective of this week. The objective we felt comfortable with was: apply economic concepts in making business decisions. This was an objective that we all felt we understood.
Apply economic concepts in making business decisions.
Economic concepts play an important role in a business’s decision-making process. The reason for this is that economics determine which opportunities has the ability to pursue based on such factors as the industry’s market structure, opportunity costs, product elasticity, and the availability of resources. Additionally, these economics concepts influence, which is of the up most importance to a firm, is its ability to maximize profits for stakeholders. For instance, a firm in a competitive market may find a certain opportunity prohibitive because the explicit and implicit costs would inhibit its ability to maximize profits. While a firm that has pure monopoly has the ability to pursue any opportunity it wishes. This is because in a pure monopoly profit maximization is often not a concern since all the firm has to do is continue to raise prices in order to increase its profit. These examples are a good demonstration of how economics can affect the decisions of a firm’s management. In the end, firms must take economics into consideration when making business decisions. A failure to do so will ultimately cause catastrophic damage to a firm that will eventually force a firm to close its doors.
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