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Managerial economics

Managerial economics

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Managerial economics

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  1. Managerial conomics

  2. Meaning • Managerial Economics is “the way economic analysis can be used towards solving business problems”. Therefore Managerial Economics is an applied Economics’ concepts applied in management problems (Decision Making & Forward Planning). • Application of economic theory for business decision making.

  3. Definitions of Managerial Economics • Prof. Spencer and Siegel men defined Managerial Economics as “the integration of economic theory with business practice for the purpose of facilitating decision making and forward planning by management”.

  4. Decision Sciences • Mathematical Economics • Econometrics • Economic Theory • Micro Economics • Macro Economics Management Decision Problem • Pricing & out put determination • Inventory lever • Advertising media & etc…. Managerial Economics Application of Economic theory and Decision science tools to solve managerial decision problems Optimal solution To Managerial Decision Problems

  5. Distinction between Economics and Managerial Economics • Economics deals mainly with the theoretical aspects of the firm. •  Economics has both Micro and Macro Economics in character •  Economics is both Positive and Normative in character • Managerial Economics is concerned with the practical problems of the firm. •  Managerial Economics is Micro-Economics in character • Managerial Economics is basically normative in character

  6. Economics deals only with the economic aspects of the problem • Economics deals with both economics of the individual as well as economics of the firm • Economics studies principles underlying wage, rent interest and profit. • The scope of economics is wide • Managerial Economics deals with both the economic and Non-economic aspects of the firm • Managerial Economics deals only with the firm not with the individuals. • Managerial Economics studies mainly with the principles of profit only • The scope of Managerial Economics is limited.

  7. Economics gives the simplified model to study • It makes some assumption on real life and business problems. • Managerial Economics modifies and enlarges the economics models • Managerial Economics attempts to solve the real life and complex business problems

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