Monogesial Economics (ME) pie aS JME weperS LO the Pim AeciSign Moaring Process we Could. be AISO eee Carled as NEtONoOMiICS OF wanogement”, Sinducrviat Economics, " ov “Busses Economics" oME iS the applicaion op VOUS Camomic Mer TSATES , POUTIES, PrincIPIES kort , mEewods ley tO enokle deacion MOKING F Proldiem tcivirg. “ME Aims to resolve PFOLIEME USING MICO ® MOCO ECONOMIC tOols- “ME OG she. eppicotien OL etonomic Meow & MEModoleay tO LESSNEE GAmirenaon Peocice —— Be-exignam 2% TL TORPASManagerial Economics -Application of beorambes te solving business problemsScope of mE The SCope of ME veferS4o iks oxea. of Staady. # ME Prwvides Monagement WIth A Strategic Pronning too! that con be USed %O get cleo perspective of the woy Trews the bUssiMOCS Lori WOKKS F_WHOX CON be clone to MAINtosn protitdlertitey i Oo exex-Choryn qQ en viwament me & primory concerned with the applicaton of econ omic grimerpres 2 ghevri@s - oe fe —nees, # there axe 5 Wypes of reSuxce decitiong made Key ty Apes of bussiness exgamizcrtions The selection of product or service to be produced The choice of production methods and resource combinations. The determination of the best price and quantity combination Promotional strategy and activities. The selection of the location from which to produce and sell goods or service to consumer, The production department, marketing and sales department and the finance department usually handle these five types of decisions.The scope of managerial economics covers two areas of decision making a. Operational or Internal issues b. Environmental or External issues a. Operational issues: Operational issues refer to those, which wise within the business organization and they are under the control of the management. Those are 1. Theory of demand and Demand Forecasting Pricing and Competitive strategy Production cost analysis Resource allocation Profit analysis Capital or Investment analysis Strategic planning Mousun pb. uevxonmensot B Externcsl ESAES KAN ENVinoameMad ISSUE TA ME ~efexS to MME Qeneq) bussiness environment in WhiiOn wwe fly operares a Study of economic. ENViVOOMeENtE THOME Include od Type OF economic System WO see courtry > ® heneoi trends in production, employment \Miome pre ADvings % investement- . > A Trend ia ginanctad iAsiitddions (banks Sincincial corpaati =AS, WRNOACEe Companies) 78) magnituae 2 trends 1A foriEQn Wode we) Trends 1n Uohour & Capita rar kes 4) Gove economic policieswature Of ME Cheatuxes) + MAfagers Susy ME BCE i+ QiveS MSiQht to reign the funchonality o the GxQani zation: a TP the mMofoge usar The principles that Gre armiicable to etohomicg Yeasonalsty, then sy wil] By YH smooth PUNCHONNG Of OrQanizaton Nee ale] rere 2 Uses Macro Economics P ‘Nature of Tele} Managerial eae a Pee Surat re Tay ere eisNature of Managerial Economics Close to Micro-Economics — finding solutions for different managerial problems of a particular firm (production schedules) Operates against the backdrop of Macro-Economics — macroeconomic conditions of the economy are also seen as limiting factors for a firm to operate. (industrial policy and Inflation) Normative Statements — one problem with normative statements is that they cannot be verified by looking at the facts, because they mostly deals with the future. (agreement or disagreement — L.P.G.) Prescriptive Action — suggest the course of action from the available alternatives for optimal solution. (mention concept to given context) Applied in Nature — case study method to conceptualize problem Offers scope to evaluate each alternative - cost and revenue Interdisciplinary — drawn from different subjects (as mentioned ) Assumptions and Limitations — validity is not universal (changes)