NATURE, SCOPE AND

SIGNIFICANCE OF
MANAGERIAL
ECONOMICS
 ECONOMICS
Those activities of mankind are studied which are
concerned with earnings and spending of money.

For the successful handling of these activities certain

laws and rules are formulated which are known as
various theories of economics.

Use of these rules & tools provided for analysing

business conditions and applying them for arriving at
various economic decision is known as managerial
economics.
MEANING & DEFINITION OF MANAGERIAL
ECONOMICS

Business Economics is that branch of knowledge in

which theories of economic analysis are used for
solving business management problems and
determination of business policies.

Business Economics serves as a bridge between

Economics and Business Management.
NATURE OF MANAGERIAL ECONOMICS

 Applied Economic Theory

 Pragmatic
 Multi – Disciplinary
 Descriptive and Prescriptive
 Applied Science
 SCOPE OF MANAGERIAL ECONOMICS

 Demand Analysis and Forecasting

 Production Function
 Cost Analysis
 Inventory Management
 Advertising
 Price System
 SCOPE OF MANAGERIAL ECONOMICS

 Resource Allocation
 Capital Management/Budgeting
 Profit Management
 Decisions Theory under Uncertainty
SIGNIFICANCE OF MANAGERIAL ECONOMICS

 Utilization of Natural and Man-Made Resources

 Solving Economic Problems
 Application of Traditional Economics
 Use of Ideas from Other Subjects
 Variety of Business Decisions
 An Integrating Agent
 Revenue to the Government
SIGNIFICANCE OF MANAGERIAL ECONOMICS

 Social Benefits
 Advertising Media
 Other Uses