What is managerial economics?

Answer 1

1) Managerial Economics is micro in character Pure Economics is both micro and macro in character

2) Managerial Economics study only practical application of the Economic principle to the problem of firm

Pure Economics deals with the study of principles itself

3) Managerial Economics deals with the Economic problems of the firm

while Pure Economics deals with Economic problems of both firm and individuals

4) Managerial Economics deals with profit theory only

Pure Economics deals with all distribution theories like rent, wages, interests, and profits.

Answer 2

Managerial economics is a study of application of managerial skills in economics,more over it help to find problems or obstacles in the business and provide solution for those problems.problems may be relating to costs,prices,forecasting the future market,human resource management,profits etc.

Managerial economics is a study of application of managerial skills in economics,more over it help to find problems or obstacles in the business and provide solution for those problems.problems may be relating to costs,prices,forecasting the future market,human resource management,profits etc.

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, Lagrangian calculus (linear). 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, for example through the use of operations research and programming.

Nature of Managerial Economics:

Following points constitute nature of managerial economics

1. Micro Economics

2. Theory of the firm

3. Managerial Economics is Pragmatic (practical in outlook)

4. Managerial economics is normative

5. Using inputs from Macroeconomics

6. It is concerned with Normative Economics

Scope of managerial economics:

Operational issues

1. Resource Allocation

2. Demand Analysis and Forecasting

3. Cost and Production Analysis

4. Pricing Decisions, Policies and Practices

5. Profit Management

6. Capital Management

7. Strategic Planning

Environmental or external issues

· Economic Environment:

· Social environment

· Political Environment

· Technological Environment

· International environment