Managerial Economics bridges the gap between economic theory and business practice Abstract: Managerial Economics can

be defined as amalgamation of economic theory with business practices so as to ease decision making and future planning by management. Managerial Economics is a science dealing with effective use of scarce resources. Study of Managerial Economics helps in enhancement of analytical skills, assists in national configuration as well as solution of problems. The key of Managerial Economics is the micro economic theory of the firm. It lessens the gap between economics in theory and economics in practice. Scope of the Study: i. ii. iii. iv. v. vi. vii. viii. Introduction. Justification of the study. Objectives of the study. Limitations of the study. Role of Managerial Economics as a bridge between economic theory and business practice. Explanation with examples. Conclusion. References.

Introduction: Managerial Economics assists the managers of a firm in a rational solution of obstacles faced on the firms activities. It makes use of economic theory and concepts. It helps in formulating logical managerial decisions. Managerial Economics applies microeconomic tools to make business decisions. It deals with a firm. Managerial Economics is of great help in price analysis, production analysis, capital budgeting, risk analysis and determination of demand. Managerial Economics uses both Economic theory as well as Econometrics for rational managerial decision making. Econometrics is defined as use of statistical tools for assessing economic theories by empirically measuring relationship between economic variables. Managerial Economics is associated with the economic theory. Thus, Managerial Economics establish a communication between economic theory and business practice. Justification of the Study:

In order to broaden our knowledge on the role of Managerial Economics, more and more study is required. The more we will study on this, the more we will be able to identify and recognize the role of Managerial Economics as a bridge between economic theory and business practice. Objectives of the Study: i. ii. iii. iv. v. To fulfill the academic requirement. To know about Managerial Economics. To know about economic theory To know about the relationship between economic theory and business practice. To know how Managerial Economics minimizes the gap and establishes communication between economic theory and business practice.

Limitations of the Study: i. ii. Time Constraint. Resource Constraint.

Role of Managerial Economics as a bridge between Economic theory And Business practice : Managerial Economics applies economic theory and methods to business and administrative decision making, because it uses the tools and techniques of economic analysis to solve managerial problems. Managerial Economics links traditional economics with the decision sciences to develop vital tools for managerial decision making. The value of Managerial Economics can be appreciated by examining its prescriptive and descriptive components. Managerial Economics prescribes rules for improving managerial decisions. It tells managers how things should be done to achieve organizational objectives efficiently. Managerial Economics also helps managers to recognize how economic forces affect organizations and describes the economic consequences of managerial be The role of Managerial Economics in managerial decision making: Managerial Economics uses economic concepts and decision science techniques to solve managerial problems. Management Decision Problems Product, Price and Output Make or Buy

Production Technique Inventory level Advertising Media and Intensity Labor Hiring and Training Investment and Financing Economic Concept Framework for Decisions Theory of consumer behavior Theory of the firm Theory of Market structure &pricing Managerial Economics Use of economic concepts and Decision Science Methodology to solve managerial decision problems. Optimal Solutions to Managerial Decision Problems Decision Sciences Tools and Techniques of Analysis Numerical Analysis Statistical Estimation Forecasting Game Theory Optimization