Managerial economics

1. MANAGERIAL ECONOMICS - S uvarna Kamble . .

2. Introduction of economics: Economics is the study of men as they live,behave,move and think in ordinary business life. It is the study of how society uses its scarce resources.

3. Managerial Economics: Managerial Economics is the study of allocation of resources available to a business firm or an organisation . ME generally refers to the integration of economic theory with business practice.

4. Managerial Economics means the application of economic theory to the problem of management. It relates to the managerial decision making in achieving a business goal by using the given business resources in the most effective manner.

5. Definition: “Managerial economics is the Integration of economic theory with business practices for the purpose of facilitating decision making and forward planning by management” -Spencer and Siegelman

6. Cont.. “Managerial Economics is the use of Economic modes of thoughts to analyse business situation” - Mc Nair and Meriam “The Purpose of Managerial Economics is to how Economic analysis can be used in formulating policies.” - Jeal Dean

7. Nature/ Charateristics or features of ME: Is Essentially Microeconomic in nature; Is Pragmatic Belongs to normative Economics i.e.Besides being Descriptive,it is also prescriptive. Is Conceptual in nature Utilizes some theories of Macroeconomics Is problem solving in nature.

8. Importance/Significance of ME: Reconciling Traditional Theoretical concepts to the actual business behaviour and conditions Incorporates useful Ideas from other Desciplines

9. Helps in reaching a variety of business decisions in a complicated Environment Build competent managers Coordinate with different departments Helps in attainment of social and economic welfare

10. Roles/Functions and responsibilities of managerial Economist: Analysis of External Factors Analysis of internal factors Specific functions -Sales forecasting -Market Research -Economic analysis of competing firms -Production and inventory schedule etc.

11. Responsibilities: To make Reasonable Profits on capital Employed Successful Forecasts Knowledge of sources of economic Informations His status in the firm

12. Managerial economics and decision making: A Decision is simply a selection from two or more courses of action. The essence of an Economic is the solution to an economic problem. When two or more alternative courses of economic action are available,there is the problem of choice – The Economic Problem.

13. Optimization: Optimization is the act of choosing the best alternative out of all the available ones. IT describes how decisions or choice among alternatives are taken or should be made. It is important in efficiently managing an enterprise’s resources and thereby maximizing shareholder wealth.

14. Optimization is a point which is either maximum or minimum. It helps in making decision

15. Marginal analysis: The utilization of each and every additional unit of resources(input)