Almost any business decision can be analyzed with managerial economics techniques, but it is most commonly applied to:
EconomicsStudy Notes. Nature of Managerial Economics Managerial Economics and Business economics are the two terms, which, at times have been used interchangeably. Of late, however, the term Managerial Economics has become more popular and seems to displace progressively the term Business Economics.
The prime function of a management executive in a business organization is decision making and forward planning.
Decision Making means the process of selecting one action from two or more alternative courses of action whereas forward planning means establishing plans for the future.
The question of choice arises because resources such as capitallandlabour and management are limited and can be employed in alternative uses. The decision making function thus becomes one of making choices or decisions that will provide the most efficient means of attaining a desired end, say, profit maximization.
Once decision is made about the particular goal to be achieved, plans as to production, pricing, capital, raw materials, labour, etc. Forward planning thus goes hand in hand with decision making. A significant characteristic of the conditions, in which business organizations work and take decisions, is uncertainty.
And this fact of uncertainty not only makes the function of decision making and forward planning complicated but adds a different dimension to it. If knowledge of the future were perfect, plans could be formulated without error and hence without any need for subsequent revision. In the real world, however, the business manager rarely has complete information and the estimates about future predicted as best as possible.
As plans are implemented over time, more facts become known so that in their light, plans may have to be revised, and a different course of action adopted.
Managers are thus engaged in a continuous process of decision making through an uncertain future and the overall problem confronting them is one of adjusting to uncertainty.
In fulfilling the function of decision making in an uncertainty framework, economic theory can be pressed into service with considerable advantage. Economic theory deals with a number of concepts and principles relating, for example, to profit, demand, cost, pricing production, competition, business cycles, national income, etc.
Statistics and Mathematics can be used to solve or at least throw some light upon the problems of business management. The way economic analysis can be used towards solving business problems. Constitutes the subject matter of Managerial Economics. Definition of Managerial Economics According to McNair and Meriam, "Managerial Economics consists of the use of economic modes of thought to analyse business situation.
Managerial Economics thus lies on the borderline between economics and business management and serves as a bridge between economics and business management. Application of Economics to Business Management The application of economics to business management or the integration of economic theory with business practice, as Spencer and Siegelman have put it, has the following aspects:Sep 26, · Managerial Economics - Managerial Economics Notes.
Discuss Managerial Economics - Managerial Economics Notes within the Managerial Economics forums, part of the PUBLISH / UPLOAD PROJECT OR DOWNLOAD REFERENCE PROJECT category; MANAGERIAL ECONOMICS uploading wonderful notes for reference on managerial economics..
Advertisements. 1) Managerial Economic: Managerial Economics lecture notes generally refers to the integration of economic theory with business practice while economics provides the tools which explain various concepts such as Demand, Supply, Price, and Competition etc.
Managerial Economics applies these tools to the management of business. Whether managerial economics is normative or positive economics: Economics is divided in to positive economics and normative economics. Price determinations under different markets.
Profit planning. profit policies and techniques and profit planning are the important aspects covered in this area.
demand distinctions and demand forecasting.5/5(2).
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MANAGERIAL ECONOMICS Managerial economics (sometimes referred to as business economics) is a branch of economics that appliesmicroeconomic analysis to decision methods of businesses or other management units.5/5(5). Managerial Economics and Financial Analysis Notes Managerial Economics and Financial Analysis Notes - MEFA Notes - MEFA Pdf notes Complete Notes: Download.