Managerial Economics
Scope Of Economics
Positive Or Normative
Area of Study
Demand analysis and forecasting
cost and production analysis
pricing decisions and practices
profit management
capital management
linear programming
theory of games
profit theory
optimisation
Significance Of Managerial economics
1.maximisation of profit 2.theory of firm
3.business accounting by accountants different from economists
4.estimating economic relationships(price elasticity,income elasticity)
5.predicting economic quantities(demand,cost,capital)
6.predicting economic quantities in decision making and forward planning
Fundamentals Concepts
incremental concept
time perspective
discounting principle
opportunity cost
equi marginal principle
Firm's Objective
profit maximisation
sales maximisation
achieving leadership
avoiding competition
prevention of goverment intervention
maintaining customers goodwill
restraining wage demands
Modern Business Firm Objective
production objective
sales objective
inventory objective
market share objective
profit objective
Role Of Managerial Economists
1.environmental studies
2.business operations
3.sales forecasting
4.market research
5.production programmes
6.investment analysis
7.environmental forecasting
relationships of managerial economics with other discipline
1.managerial economics with micro economics
2.managerial economics with macro economics
3.managerial economics with mathematics
4.managerial economics with statistics
5.managerial economics with accounting
- managerial economics with decision making
7.managerial economics with operation reasearch