Managerial Economics

M.E is the application of economic theory & quantative methods to the managerial decision making process.

Managerial Economics
Managerial economics
Managerial economics

Managerial Economics
Managerial
It refers to the function of management of decision making & forward planning

Economics
Economics is the study of the optimal use of resources to satisfying human needs & wants

Managerial Economics applies to economic theory & methods to business & administrative decision making Hirschey & Pappas

Concept of M.E
Concept of M.E
Economic Concept Theory of CB Theory of firm Theory of market structure
Decisions sciences Management Decision process Tools & technique of analysis Price & Output Numerical analysis Make or Buy Statistical estimation Production Technique Forecasting Inventory level Game theory Advertising Media & intensity optimization

Managerial Economics Use of economic concepts & decision science methodology to solve managerial decision problem Optimal solution to managerial decision problems

ELEMENTS OF MANAGERIAL ECONOMICS

1. APPLICATION OF ECONOMICS 2. BETTER MANAGEMENT DECISIONS 3. OPTIMUM ALLOCATION OF SCARCE RESOURCES TO COMPETING ACTIVITIES

Responsibility of Managerial Economist

Better management of resources Forecasting Additional information To maximize profit Conceptual as well as practical Researcher Thinking, discussing & criticising Taking up challenging tasks

Importance of Managerial Economics

Utilization of natural & man-made resources Solving economic resources Application of traditional economics Use of ideas from other subjects Variety to business decisions Integrating agent Revenue to govt. Social benefits Advertising media

Limitations of Managerial Economics

Emergence of monopolies Emergence of oligopoly Exploitation of workers Social cost Cut-throat competition