Submitted to:

Mr. Rohit

Created By:
Pranita Jain
iitm
 Introduction
Managerial Economics is economics
applied in decision-making.
Decision making is the process to
select a particular course of action
from among a number of
alternatives. It is concerned with
those aspects of economics and its
tools of analysis which are used in
the process of decision making of
business enterprise.
 Definition
“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.”
-- By Edwin
Mansfield
Key Points Of
Definition
 Decision-Making

 Economic Methodology

 Economic goals of firm

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

Economic Methodology - It is a relation

between ideas , thoughts , intuitions &
experience with economic tools &
techniques .

Economic goals of firm - In the

nutshell, It is making maximum gains out
of available resources.
 Scope Of Managerial
Economics
 Micro Economics
when something is concerned with
individual (person, firm or household)

 Macro Economics
something related to the environment
as a whole
 Micro economic
theories
Theory of production;

 Theory of price determination;

Theory of profit;

Theory of demand.
 Macro economic
theories
Environment or external issues;

Theories of government policies;

Theory of capital and Investment.

Nature of managerial
economics
It is a science.

It is an art.

It is a micro economics.

It is a normative science.

Role of Managerial
Economist
Making decisions and processing information
are the two primary tasks of managers. The
task of organizing and processing information
and then making an intelligent decision based
upon this information and the basic theory
can take two general form:

 Specific decision
 General task
 Specific decision
Production scheduling
Demand forecasting,
Market research,
Economic analysis of industry,
Investment appraisal,
Advice on trade
Security management analysis,
Pricing and related decision,
Analyzing and forecasting environmental
factors.
 General task
External factors Internal factors
General economic Determination of
conditions pricing policies.
Demand for the Decision of expansion
product of business activities .
Input cost of the Determination of level
firm. of efficiency and
Market conditions. operation.
Firm’s share in the Determination of
market. wages policy.
Economic policies.
Responsibilities of Managerial
Economist
To measure the increase in earning capacity of
the firm.
To make successful forecasting.
To contact the sources of Economic information
and Experts.
To keep the management informed of all the
possible economic trends.
To achieve economic respectable status in the
firm.
To perform functions sincerely.
 References
Google search engine.
Wikipedia
Scribd.com
Slideshare.com