Discuss what managerial economics is all
It uses factual data for solution of economic problems.
Nature and scope of managerial economics ppt
For this purpose, he should join professional and trade associations and take an active part in them. Click below to see contributions from other visitors to this page A business is started with the main aim of earning profit. The sales forecast acts as a link between the external uncontrollable factors and the internal controllable factors and are intimately related to general economic activity. Gregory Mankiw has given ten principles to explain the significance of managerial economics in business operations. It also goes deeper into such aspects as motives of holding inventory, cost of holding inventory, inventory control, and main methods of inventory control and management. We live in a world with scarce resources The basic principle that individuals cannot have everything that they want and that others want the same things that we want. Macroeconomics approaches the same phenomena at an aggregate level, for example, the total consumption and production of a region. Profit forecasting is an essential function of any management. Put another way, the organization must create value The difference between what individuals acquire and what they produce; the basis of exchange between individuals and organizations. The micro-economic analysis may be undertaken at three levels: i The equalisation of individual consumers and produces; ii The equalization of the single market; iii The simultaneous equilibrium of all markets. Personnel decisions cover the areas of manpower planning, recruitment, selection, training and development, performance appraisal, promotion, transfer, etc. The deductive method begins with postulates and hypotheses which are arbitrary.
Conditions of Uncertainty You know the conditions of risk and uncertainty are involved in all business situations. A lot of material has been written so far, but the crux of the discipline is a logical decision-making process for allocation of scarce resources to the best possible alternatives.
For this purpose, he should join professional and trade associations and take an active part in them. What is managerial economics? Spencer and L. If the inventory level is very low, it hampers production. This logical core of theory cannot easily be detached from the empirical part of the theory.
Businesses have finite human and financial resources; managerial economic principles can aid management decisions in allocating these resources efficiently. It helps in covering the gap between the problems of logic and the problems of policy.
Theory of Capital and Investment Decisions: Capital is the most critical factor of business.
based on 24 review