Managerial Economics Managerial Economics Managerial Economics can be defined as amalgamation of economic theory with business practices so as to ease decision-making and future planning by management. It makes use of economic theory and concepts. It helps in formulating logical managerial decisions.
The below mentioned article provides an overview on Managerial Economics: Concept of Managerial Economics 2. Definitions of Managerial Economics 3. Meaning of Managerial Economics 4. Managerial Economics and Economic Theory 6. Concept of Managerial Economics: Managerial economics is an important way of thinking about and analysing the problems that arise in both profit seeking and non-profit seeking enterprises.
Managerial economics emphasizes the principles of economics that underlie managerial practice.
The stress is on applied economic analysis. Its popularity is attributable to the growing applications of economic theory in the commercial organisations as also in non-profit organizations and government companies.
It seems that the subject will become more and more popular in future. In this context one may venture to quote Joel Dean whose comment of more than four decades ago seems very important and relevant even today: What is the subject all about? Why do we study the subject at all?
These two questions have to be answered at the outset before we proceed further. We may well start with a few definitions. Definitions of Managerial Economics: Meaning of Managerial Economics: Economics is concerned with the allocation of scarce resources, having alternative uses, among competing goals or unlimited ends.
Managerial economics is slightly specific in its approach. It studies the economic aspects of managerial decision making. It provides the practicing manager with those tools and techniques which are useful in day-to-day decision making.
Managerial economics is pragmatic. Its stress is on the real commercial world.
Most production takes place in business firms. In managerial economics the stress is on the process of resource allocation and decision making within the firm which is thought to be the most efficient form of organizing production.
But the scope of the former is broader than that of the latter. While the latter deals with the decision making in profit making organizations, the former provides methods and a point of view that are also applicable in managing non-profit organizations like hospitals and public corporations like the Indian Airlines Corporation.
Governments should try to obtain the maximum benefit for tax payers in spending their revenues; government agencies can measure their efficiency through cost-benefit analysis.
Marketing and Sales Applications: Marketing and sales functions largely depend on an analysis of consumer demand.
The price decisions taken by marketing managers have two major aspects: To be more specific, the marketing manager has to weigh the advantages of increased sales volume against the advantages of lower sales price per unit. That is to say, price reduction will have two effects, of which one is favourable to the firm and the other is unfavorable.Managerial Skill Sets.
Much like a professional basketball player needs to know how to dribble and shoot a basketball, or how a home builder understands the process of framing a house, managers. School of Distance Education Managerial Economics-I plombier-nemours.com 2 UNIVERSITY OF CALICUT SCHOOL OF DISTANCE EDUCATION .
Robert Blake and Jane Mouton proposed a graphic portrayal of leadership styles through a managerial grid. The grid depicted two dimensions of leader behavior - concern for people and concern for production.
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