The document discusses several key concepts in managerial economics including the goals of firms, production functions, breakeven points, the law of diminishing returns, the law of supply, and cost functions. Specifically, the major goals of firms are profit maximization, cost minimization, increasing market share and productivity. Production functions relate physical output to inputs using a mathematical formula. The breakeven point is where total revenue equals total cost. The law of diminishing returns states that output per unit decreases as one input is increased while others stay constant. The law of supply establishes the direct relationship between price and quantity supplied. Cost functions predict expenses associated with production levels given input prices.

1. Managerial economics
• Goals of the firm
• Goals of the firms are many but there are major goals
that firm struggles to obtain and they are:
• Profit maximization
• To minimize cost of production
• To create a high market share
• To increase productivities and revenue
• To industry leader in market innovation and so on
• Growth rate sales revenue maximization and
• Consumer satisfaction

2. Managerial economics
• Production function
• Economics, a production function relates physical output
of a production process to physical inputs or factors of
production to produce o product.
• In mathematically production function is the form of Q=f
(capital, labor, land and or row materials entrepreneurship).
• Breakeven point
• In economics breakeven point is the point which the cost or
expenses and revenue are equal, there is no loss or gain.
On the other hand breakeven point is where the total
revenue and total cost are meeting. In the linear case the
break-even point is equal to the fixed costs divided by the
contribution margin per unit.

3. Managerial economics
• Low of diminishing returns
• A concept in economics that if one factor of production (number of
workers, for example) is increased while other factors (machines
and workspace, for example) are held constant, the output per unit
of the variable factor will eventually diminish. That is called low of
diminishing returns.
•
• Low of supply
• The low of supply states that, in increase in price will lead an
increase in quantity supplied in this way there is direct relationship
between price and quantity supplied. According to managers the
will increase productivity because one of the main objectives of the
firm is profit maximization.

4. Cost function
• Cost function
•
• The cost function is a function of input prices and
output quantity. Its value is the cost of making
that output given those input prices. A
mathematical formula used to predict the cost
associated with a certain action or a certain level
of output. Businesses use cost functions to
forecast the expenses associated with
production, in order to determine what pricing
strategies to use in order