Short answers, pulled from the story.
Managerial economics is a branch of economics that applies economic methods to organizational decision-making. It guides managers in decisions relating to a company's customers, competitors, suppliers, and internal operations.
The two main purposes of managerial economics are optimizing decision making when a firm faces problems using macro and microeconomic theories, and analyzing how short-term and long-term planning decisions affect a firm's revenue and profitability.
Alfred Marshall established the concept of elasticity of demand. He described it as measuring how much the amount demanded increases for a given fall in price and diminishes for a given rise in price.
The three types are first-degree or perfect price discrimination, which charges each buyer what they are willing to pay, second-degree price discrimination, which prices by quantity purchased, and third-degree price discrimination, which prices by demographic group such as student or senior discounts.
Tournament theory explains why pay differs across roles in a business hierarchy, with agents who work toward promotion rewarded with a higher, non-incremental pay rate. Research shows tournament-style incentive structures raise individual performance but consistently disadvantage certain groups, such as women.
The five-step process is to define the problem, determine the objective, discover the alternatives, forecast the consequences, and make a decision. The final step includes a sensitivity analysis showing how a solution's output changes as its inputs change.