Managerial Economics

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Managerial Economics

• Unit - 1

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• Managerial economics is concerned with the
  application of economic principles and
  methodologies to the decision process with in the
  organization .it seeks to establish rules and
  principles to facilitate the attainment of the
  desired economic goals of management. Douglas

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Decision making

• Decision making - It is the process of selecting
  best out of alternative opportunities open to the
  firm.

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Characteristics of M. E.

• Micro in nature
• Based on the Theory of Markets and Private
  Enterprise
• Goel-Oriented
• Normative in nature
• Macro analysis

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Scope of M.E.

• Theory of Demand
• Theory of production
• Analysis of market-structure and pricing
• Profit Analysis and profit Measurement
• Theory of capital and Investment decisions

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Why do managers need to know managerial economics
(Significance)

• Better management of resources
• Helps in decision making and forward planning
• Helps in understanding International Trade
• Helps in understanding various policies and
  working of govt.
• Goal of maximum profit
• Economic forecast

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Nature of M.E.

• Economics as a Science
• It is a systematic body of knowledge based on
  certain principles, capable of general
  application, which describes the relationships
  between a set of given causes and their effects.
  This knowledge is obtained through the process of
  observation, experimentation and testing.

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It involves

• Systematic body of knowledge
• Scientific inquiry and observation
• Experimentation
• Universal truths

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Economics as an Art

• An art is system of rules for the attainment of a
  given end.
• -Keynes

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