MANAGERIAL ECONOMICS

“MANAGERIAL ECONOMICS IS CONCERNED WITH THE APPLICATION OF ECONOMIC CONCEPTS AND ECONOMIC

ANALYSIS TO THE PROBLEMS OF FORMULATING RATIONAL
MANAGERIAL DECISIONS” - EDWIN & MANSFIELD

“IT IS THE INTEGRATION OF ECONOMIC THEORY WITH BUSINESS PRACTICE FOR THE PURPOSE OF FACILITATING DECISION-MAKING AND FORWARD PLANNING BY MANAGEMENT” - MILTON SPENCER & LOUIS SIEGELMAN

McNAIR & MERIAM .“MANAGERIAL ECONOMICS CONSISTS OF THE USE OF ECONOMIC MODE OF THOUGHT TO ANALYSE BUSINESS SITUATION” .

CHARACTERISTICS: 1] IT IS PRAGMATIC AND REALISTIC 2] IT IS MICRO-ECONOMIC IN NATURE 3] IT USES MACRO-ECONOMICS ALSO 4] IT IS NORMATIVE RATHER THAN POSITIVE 5] IT IS GOAL-ORIENTED .

SCOPE: 1] DEMAND ANALYSIS 2] DEMAND FORECASTING 3] PRODUCTION ANALYSIS 4] COST ANALYSIS 5] PRICING 6] PROFIT ANALYSIS 7] CAPITAL BUDGETING .

ECONOMICS vs MANAGERIAL ECONOMICS 1) ECONOMICS IS A SCIENCE WHICH STUDIES HUMAN BEHAVIOUR AS A RELATIONSHIP BETWEEN ENDS AND SCARCE MEANS WHICH HAVE ALTERNATIVE USES. MANAGERIAL ECONOMICS IS A SCIENCE WHICH STUDIES THAT ASPECT OF MANAGERIAL BAHAVIOUR WHICH IS CONCERNED WITH ECONOMIC RATIONALE OF DECISION MAKING .

2) ECONOMICS IS A WELL ESTABLISHED SUBJECT MANAGERIAL ECONOMICS IS A NEW AND DEVELOPING SUBJECT 3) ECONOMICS IS HIGHLY THEORETICAL MANAGERIAL ECONOMICS IS BASICALLY PRACTICAL 4) ECONOMICS IS POSITIVE AS WELL AS NORMATIVE MANAGERIAL ECONOMICS IS NORMATIVE IN NATURE 5) ECONOMICS DEALS WITH PROBLEMS OF INDIVIDUALS & FIRMS MANAGERIAL ECONOMICS DEALS WITH THE PROBLEM OF FIRMS .

MANAGERIAL ECONOMICS CONSIDERS ECONOMIC AS WELL AS NON-ECONOMIC FACTORS. 7) SCOPE OF ECONOMICS IS VERY WIDE SCOPE OF MANAGERIAL ECONOMICS IS LIMITED .6) ECONOMICS CONSIDERS ONLY ECONOMIC FACTORS.

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