Economic Reforms: Nature and Objectives paring budget, setting interest rates, etc. If the manager uses the principles applicable to economic behavior in a reasonably, then it will result in the smooth functioning of the organization. A. Managerial Economics take a wider picture of firm, i.e., it deals with questions such as what is a firm, what are the firm’s objectives, and what forces push the firm towards profit and away from profit. Nature and Scope of Business Economics Characteristics or Nature of Business Economics / Managerial Economics: a) Managerial Economics is a Science: Managerial economics is a science because it establishes relationship between causes and effects. First, managerial economics is micro-economic in character. It monitors and ensures that all scarce resources like labor, capital, land, … Management is also concerned with the task of allocating scarce resources between alternate uses, keeping in view the objectives of the organisation. Cost and Production Analysis 3. Part I (Chapters 1 and 2) examines the nature, scope and methods of managerial economics and the theory of the firm. Formerly it was known as “Business Economics” but the term has now been discarded in favour of Managerial Economics. It is a specialised stream dealing with the organisation’s internal issues by using various economic theories. Introduction. Nature and scope of managerial economics ppt @ mba 2009 Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. 0521819938 - Managerial Economics- by Nick Wilkinson Excerpt. The prime objective of managerial economics is to enhance the decision making process. As a Science Using economics tools to analyze business situations 3. It studies the effects of a change in price of a commodity factors and forces on the demand of a particular product. It deals with the use of economic concepts and principles of business decision making. So, it is considered to be an ideal combination of art and science. Managerial economics encompasses all theories and tools required for the decision making process of the business organizations and for achieving its aims and objectives most efficiently. Nature of Managerial Economics. These devices can be as simple as manually recording production processes to making cost-effective suggestions to developing a top-scale database program that will help identify obstacles and potential growth areas. The practical use of economic principles in managerial economics is used to solve the future planning and problems of management. It deals with the use of economic concepts and principles of business decision making. The key function of managerial economics is efficient decision making and chooses the most suitable action out of two or more alternatives. Integrating economic theory with business practice 2. An objective of managerial economics is to implement devices that will measure and analyze a broad scale of a company’s financial goals. The economic policy also influences the national ownership, labour market, and several other economic areas where government interventions is required. Managerial economics is a discipline which deals with the application of economic theory to business management. Concept of Managerial Economics • Managerial economics is the discipline that deals with the application of economic concepts, theories and methodologies to the practical problems of businesses/firms in order to formulate rational managerial decisions for solving those problems. The managerial economics deals with the problems faced by the individual organization such as main objective of the organization, demand for its product, price and output determination of the organization, available substitute and complimentary goods, supply of inputs and raw material, target or prospective consumers of its products etc. Definition: Managerial economics is a stream of management studies which emphasises solving business problems and decision-making by applying the theories and principles of microeconomics and macroeconomics. If you continue browsing the site, you agree to the use of cookies on this website. Managerial economics bridges the gap between economics in theory and economics in practice. Managerial economics supports in analyzing all the decisions and forecasts related to business. Even then the following fields fall under Managerial Economics: 1. The basic objective of managerial economics is facilitating formulation of appropriate policies and strategies. So, To know the nature of managerial economics, it is important to know whether it is science or art or both. It assists the managers in logically solving business problems and rational decision making. This basic objective can be elaborated into the following larger objectives of managerial economics: 1. Demand Analysis and Forecasting 2. In short, managerial economics emphasizes upon the firm, the decisions relating to individual firms and the environment in which the firm operates. Managerial economics is a discipline which deals with the application of economic theory to business management. Applying economic principles to solve business problems 4. Scope of Managerial Economics: It is not yet clear as it is a developing science. EssayCorp provides the high quality of assignment assistance to the students studying in different universities. Nature of Managerial Economics: It would be useful to point out certain chief characteristics of managerial economics, as they throw further light on the nature and the subject-matter, which help in a clearer understanding the subject. Nature of Managerial Economics: Managers study managerial economics because it gives them insight to reign the functioning of the organization. Our professional assistance will surely yield you the higher grades. Formerly it was known as “Business Economics” but the term has now been discarded in favour of Managerial Economics.