Economics is the social science that analyzes the production, distribution, and

consumption of goods and services. The term economics comes from the Ancient
Greek οἰκονομία (oikonomia, "management of a household, administration")
fromοἶκος (oikos, "house") + νόμος (nomos, "custom" or "law"), hence "rules of the
house(hold)".[1] Current economic models developed out of the broader field ofpolitical
economy in the late 19th century, owing to a desire to use an empiricalapproach more
akin to the physical sciences.

DEFINITION

Managerial Economics generally refers to the integration of economic theory

with business practice. While economics provides the tools which explain
the various concepts such as demand, supply, price, competition etc.
Managerial economics applies these tools to the management….

MEANING SCOPE AND METHODS OF MANAGERIAL ECONOMICS

INTRODUCTION

Emergence of managerial economics as a separate course of management studies can be

attributed to at least three factors.:

(a) growing complexity of business decision making process due to changing market
conditions and business environment

(b) consequent upon, the increasing use of economic logic , concepts theories and tools o
economic analysis in the process of business decision making

(c) Rapid increase in demand for professionally trained managerial manpower

The growing complexity of business decision- masking has inevitably increased the
application of economic concepts, theories and tools of economic analysis in this area.
The reason is that making an appropriate business decision requires a clear
understanding of market conditions, the nature and degree of competition, art
fundamentals and the business environment This requires intensive and extensive
analysis of the market conditions in the product market, input market and financial
market.. On the other hand, economic theories, logic and tools have been developed to
analyze and predict market behaviour. The application of economic concepts, theories,
logic and analytical tools in the assessment and prediction of market conditions and
business environment has proved to be of great help in business decision making. The
contribution of economics to business decision-making has come to be widely
recognized. Consequently economic theories and analytical tools which are widely used
in business decision-making, have crystallized into separate branch of management
studies, called Managerial Economics or Business Economics

DEFINITION

Managerial Economics generally refers to the integration of economic theory

with business practice. While economics provides the tools which explain
the various concepts such as demand, supply, price, competition etc.
Managerial economics applies these tools to the management….

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What is Managerial Economics? Explain its nature,
scope and its application in decision making.
For most purposes, economics can be divided into two broad
categories such as micro economics and macro economics. Macro
economics is the study of economic system as a whole. It
includes techniques for analyzing changes in total output, total
employment, the consumer price index, the unemployment rate
and exports & imports.
Although macroeconomics issues and policies command
much of the attention in newspapers and on television, the micro-
dimensions of the economy are also important and are often
relevant to the day-to-day problems facing the manager. Micro
economics focuses on the behavior of the individuals on the
economic stage, that is, firms and individuals and their interaction
in markets.
Managerial Economics should be thought of as applied
micro economics. It is an application of the part of micro
economics that focuses on the topics that are of greatest interest
and importance to managers. Managerial Economics includes
demand, production, cost, pricing, market structure, and
government regulations. A strong understanding of the principles
that govern the economic behavior of firms and individuals is an
important managerial talent. The rational application of these
principles should result in better managerial decisions, higher
profits, and an increase in the value of the firm