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Meaning and Definition Nature Scope & Subject- Matter Significance Role of Managerial Economist
Managerial Economics
Definitions:
Haynes, Mote and PaulManagerial Economics is economics applied in decision making. It is a special branch of economics bridging the gap between abstract theory and managerial practice. Spencer and Seegelman Business Economics (Managerial Economics) is the integration of economic theory with business practice for the purpose of facilitating decision making and forward planning by management.
MansfieldManagerial economics is concerned with application of economic concepts and economic analysis to the problems of formulating rational managerial decision.
Managerial Economics is science of decision making concerned with finding and implementing of the solution to managerial problems. It is Normative in approach, It deals with prescription what a firm should do and how it should achieve it. Positive science is descriptive in nature it deals with what is, what was and what will be. Managerial economics is not positive in its approach. Managerial economics is more Pragmatic
Managerial Economics and Macro Economics All the firms operating in the market have to take under consideration the constituent of the economic environment in which they operate for its proper functioning. This economic environment is nothing but the Macro economics elements.
Managerial economics performs two major functions: 1) Decision making, and 2) Forward Planning
Contd..
1) 2) 3) 4) 5) 6)
And this functions are to be performed under uncertainty, for this the following subject matter s are covered under its study: Demand and Supply Analysis Production and Cost Market Structures Price and Output Decision Profit Analysis Basics of Macro economics , etc
1) 2) 3)
He has to undertake certain specific functions such as: Demand forecasting Cost and pricing decision Economic analysis of industry
Price and Output Decisions Demand Estimation Choice of a Technique of Production Advertising Decision Long Run Production decision Investment Decision