Economics Case Study

ECO 518 CASESTUDY 2

8/1/2012

BY: Vincenzo Marchese

CALIFORNIA INTERNCONTINENTAL UNIVERSTIY

ABSTRACT

Managerial economics (also called business economics), is a branch of economics that

applies microeconomic analysis to specific business decisions. As such, it bridges economic

theory and economics in practice. It draws heavily from quantitative techniques such as

regression analysis and correlation. If there is a unifying theme that runs through most of

managerial economics it is the attempt to optimize business decisions given the firm's objectives

and given constraints imposed by scarcity, through the use of operations research and

programming. The two chapters that I chose to analyze are Chapter 5: Demand Estimation and

Forecasting and Chapter 6: The Theory and Estimation of Production.

Chapter 5- DEMAND ESTIMATION AND FORECASTING

When starting your own business one must put a lot of thought, belief, and finances into

your vision. It is definitely not the “FUN” part of starting your own business, My ultimate goal is

to one day run a fully operating Creative Service Agency, where we help businesses achieve

their goals of branding, marketing, and publicity which will aid in the success of their product or

services.

This chapter concentrates on the two important statistical approaches to estimating and

forecasting the demand for a product Data Collection, and Regression Analysis. Why the

purpose of this when beginning your own business? For starters you want to know what market

you are getting into and where you potentially stand. The purpose of demand forecasting and

estimation is to find a business's potential demand so business owners can make accurate

decisions about pricing, business growth and market potential. Business owners base pricing on

demand trends in the market. For example, if the market...