Introduction_to_Managerial_Economics_Presentation.pptx

Introduction_to_Managerial_Economics_Presentation.pptx

1. Introduction to Managerial Economics Presenter: Ajay Kumar, PhD. (IIT Dhanbad) Assistant Professor –Department of Business Economics Email- [email protected]

2. Introduction to Economics - Definition: "Economics is the study of how societies use scarce resources to produce valuable commodities and distribute them among different people." - Paul Samuelson - Purpose of Economics: - Understanding economic operations and interactions. - Microeconomics vs. Macroeconomics: - Microeconomics: Focuses on individual and business decisions. - Macroeconomics: Examines overall economic dynamics like inflation and GDP.

3. Nature and Scope of Managerial Economics - Definition: Integrates economic theory with business practice. - Scope: - Demand forecasting - Cost analysis - Pricing strategies - Profit management - Capital allocation - Importance in Strategic Planning

4. Difference Between Economics and Managerial Economics - Comparison: - Focus: General economy vs. Specific business issues - Scope: Theoretical vs. Practical application - Methods: Analytical models vs. Decision science tools - Applications: Policy formulation vs. Business strategy

5. Fundamental Concepts of Managerial Economics - Key Concepts: - Opportunity Cost: Choosing one option means forgoing the next best alternative. - Marginal Principle: Decisions about quantities are made by comparing marginal benefits and costs. - Incremental Concept: Decisions are based on the impact of changes in conditions. - Time Perspective: Decisions considering the time factor. - Discounting Principle: Future values are discounted back to present value. - Equi -Marginal Principle: Resources are allocated across fields where the marginal benefits are equal.

6. Role of Managerial Economics in Decision Making - Decision Framework: Using economic analysis for better resource allocation. - Examples in Decision-Making: - Pricing Strategy: Analyzing demand and cost to set prices. - Cost Control: Identifying and leveraging economies of scale. - Product Decisions: Market analysis for new product decisions.

7. Q&A