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Meaning of Managerial Economics:

Managerial economics or business economics is one and the same term and are used synonymously. It is a branch of economics that provides with the application of microeconomic analysis to businesses and management units for decision-making processes. Managerial economics act as bridge to gap between 'theoria' and 'pracis'. The principles of managerial economics were derived from quantitative techniques such as correlation, regression analysis, and Lagrangian calculus (linear).

Managerial economics is thus a study of economics and its applications on managerial skills. It provides business a process that helps in determining, anticipating, and resolving potential problems. These problems can be related to various things like costs, forecasting future market, prices, human resource management, profits and so on.

Definition:

According to Spencer and Siegelman, Managerial economics is defined as the "the integration of economic theory with business practice for the purpose of decision-making and forward planning by management".

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Characteristics of managerial economics:

1. Use of Microeconomics: It is based on the principles of an individual business firm or an individual industry.

2. Normative economics: It is concerned with remedial measures that a management took under various situations or circumstances.

3. Pragmatic Approach: It is considered to be as pragmatic.

4. Based on Theory of firm: Managerial economics uses principles, which are known as the theory of Firm or 'Economics of the Firm'.

5. Use of macroeconomics: Managerial economics includes aspects of macroeconomic theory.

6. Helping the management: Managerial economics helps and supports the management in taking remedial decisions and strategies for future.

7. Prescriptive: It is applied rather than theoretical.

Scope of Managerial Economics:

The scope of managerial economics includes following subjects: 

1. Theory of production

2. Theory of profit

3. Theory of demand

4. Theory of capital and investment

5. Theory of exchange or price theory

6. Environmental issues

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Related Tags : Economics homework help

Topic covered beneath our Managerial Economics Assignment Help service:

  • Cost Function
  • Forecasting
  • Marginal Analysis
  • Market Structures
  • Regression Analysis
  • Consumer Behaviour
  • Economic Theory And Managerial Theory
  • Game Theory And Pricing Strategies

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