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PROJECT - ECONOMICS EMBA – 12

Roll No-
MANAGERIAL ECONOMICS
MANAGERIAL ECONOMICS: CONCEPT, SCOPE
AND OTHER DETAILS
“Managerial economics is concerned with the application of economic principles and
methodologies to the decision-making process within the firm or organization. It seeks to
establish rules and principles to facilitate the attainment of the desired economic goals
of management”-Douglas.
According to Mansfield, “Managerial economics is concerned with the application of
economic concepts and economics to the problems of formulating rational decision
making.
As per Haynes, Mote, and Paul, “Managerial Economics refers to those aspects of
economics and its tools of analysis most relevant to the firm’s business decisions-
making process. By definition, therefore, its scope does not extend to macroeconomic
theory and the economics of public policy an understanding of which is also essential
for the manager.”
IMPORTANCE OF MANAGERIAL ECONOMICS
WHAT IS THE IMPORTANCE OF MANAGERIAL ECONOMICS IN
THE DECISION-MAKING PROCESS OF BUSINESS?

Managerial decision areas includes:

assessment of investible funds
selecting business area
choice of product
determining optimum output
sales promotion.
ROLES OF MANAGERIAL
ECONOMICS IN BUSINESS
DECISION
 Production Decision
Inventory Decision
Cost Decision
Marketing Decision
Investment Decision
Personnel Decision
 Defination

MICROECONOMICS
 Study of Individual units
Price Theory
Slicing Method
Partial Equilibrium
Microscopic Approach Principle
Allocation of resource is Limited
Limited Scope
Analysis of Market Structure.
MICROECONOMICS THEORY
Understanding the difference between Micro and Macro
Economics. Microeconomics studies the economic behavior
of an individual firm, industry, household, consumers etc in
an economy. On the other hand, Macroeconomics studies
the economic behavior of firms, industries, household
consumers etc at an aggregate level.
•Microeconomics studies the economic behavior of an individual firm, industry,
household, consumers etc in an economy. On the other hand, Macroeconomics studies
the economic behavior of firms, industries, household consumers etc at an aggregate
level. In other words, we can say that Macroeconomics is the study of economy or
economic systems as a whole.

•Microeconomics studies issues like demand, supply, production, production efficiency,

cost, cost minimization, market structures, pricing, distribution, profit maximization etc at
the individual firm, industry, household or at consumer level. On the other hand,
Macroeconomics studies the economic issues and problems affecting economy at a
broader level. These issues can be problem of inflation, deflation, stagflation, business
cycles, problem of economic growth, national income, employment etc.