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Economic Theory

Micro Economics

Macro Economics

Micro- Economics
Consumers Producers

Economic Organisms

Economic Quantities

Prices Wages Income

Macro- Economics
Examines the aggregate behaviour of the entities like Firms, Households and the Government Concerned with the formulation of M.E policies such as Monetary policy, Fiscal Policy, Industrial Policy, Exchange Control etc.

Operational Issues
Nature of the product What to produce ?? Size of the firm How much to produce?? How to manage inventory ?? Choice of Price- How to price the commodity?? How to face price competition?? How to promote sales??? How to manage profit and capital??

Scope
Micro Economic Theories Theory of Demand Theory of Production and Production Decisions Analysis of Market Structure and Pricing Theory Profit Analysis and Profit Management Theory of Capital and Investment Decisions

External Issues
Overall Economic , Social and Political atmosphere of the country General trends in National Income, Employment, Prices, Savings and Investment Trends in the working of Financial Institutions Strength of Capital Market Trends in Foreign Trade Trade unions, consumer co-operatives etc

Scope
Issues related to Macroeconomic Trends in the Economy Issues related to Foreign Trade Issues related to Government Policies

Other Disciplines
Mathematical Tools Statistics Management Theory Accountancy Operations Research

Managerial Economics is concerned with application of Micro and Macro Economics to problems in Business Management

The fundamental problem to which managerial economics addresses is the problem of rational resource allocation and mobilization in the various departments of business organization viz sales, marketing, production, personnel, purchase.

Example
Organization running Newspaper Business Newspaper publishing is a manufacturing process. The basic raw material is - news (including editorial opinion indicating newspaper ideology and newsprint)

Features of newspaper creating 'image' of newspaper in public mind and advertising

Different Departments
Editorial Advertising Mechanical / Production Circulation Finished Product - .????

Issues
The problem of survival and expansion has become more complex in publishing and circulating newspaper in competitive market conditions

This invariably led to an approach to newspaper management, which did not pay much needed attention to the 'business aspects of publishing a newspaper

Local newspapers have local interest and they are published in specific local language attracting the local readers
The primary motive of a local newspaper unit is to create an attraction by organizing local readership and thereby earn maximum profits This is how local monopolies' are created

Newspaper Business

Mgt of Newspaper unit

Public ( Readership)