managementand economics had led to the development ofmanagerial economics. Economic analysis
isrequired for various concepts such as demand,profit, cost, and competition. In this way,managerial
economics is considered as economicsapplied to “problems of choice’’ or alternativesand allocation of
scarce resources by the firms.Managerial economics is a discipline that combineseconomic theory
with managerial practice. It helpsin covering the gap between the problems of logicand the problems
of policy. The subject offerspowerful tools and techniques for managerialpolicy making.Source:
is a field in appliedeconomics in which quantitative methods andeconomic theory to analyze business
enterprises.The factors that contribute to the diversity ofthe organizational structures and
relationship ofthe firm with capital, labor, and product marketsare analyzed.Managerial economics is
the field of economicsthat deals with the economic concepts and analysisof problems that are
required to formulaterational managerial decisions. It is a branch ofeconomics that applies
microeconomic analysis fordecision making and other management units.Source:
the economic concepts, theories,tools, and methodologies to solve practicalproblems in a business. In
other words, managerialeconomics is the combination of economics theoryand managerial theory. It
helps the manager indecision-making and acts as a link betweenpractice and theory.[1] It is
sometimes referredto as business economics and is a branchof economics thatapplies microeconomic
analysis to decisionmethods of businesses or other management units.Source: WikipideaTo quote
Mansfield, “Managerial economics isconcerned with the application of economicconcepts and
economic analysis to the problems offormulating rational managerial decisions.Spencer and
Siegelman have defined the subjectas “the integration of economic theory withbusiness practice for
the purpose of facilitatingdecision making and forward planning bymanagement.”Source:
Economics in ManagerialDecision MakingManagerial
Economics has applications in bothprofit and non-profit sectors. For example, anadministrator of a
non-profit hospital strives toprovide the best medical care possible givenlimited medical staff,
equipment and relatedresources. Using the tools and concepts ofManagerial Economics, the
administrator candetermine the optimal allocation of these limitedresources. In short. Managerial
Economics helps in allocating these resources efficiently.Macroeconomics models and their estimates
Managerial EconomicsThe most important function in managerialeconomics is decision making. It
involves thecomplete course of selecting the most suitableaction from two or more alternatives. The
primaryfunction is to make the most profitable use ofresources which are limited such as labor,
capital,land etc. A manager is very careful while takingdecisions as the future is uncertain; he
ensuresthat the best possible plans are made in the mosteffective manner to achieve the desired
objectivewhich is profit maximization.Source: Tutorialspoint