What is Managerial Economics?

What is Managerial Economics?

We all know that Economics is a study that involves production, distribution and consumption of goods and services. But Economics has further divisions amongst which Managerial Economics is also a very important part, of the subject.

In simpleton’s terms, Managerial Economics is the Application of Economic theory to the problem of management. The subject of Managerial Economics is viewed as economics that is mainly applied in order to solve problems at a firm. The business executive performing this study or let’s say this problem solving method to a firm, is responsible to assume and analyze things that are occurring inside a firm. It is said, that it involves an analysis of the allocation of the resources that are available to a firm. This is also possibly done to a unit of management among the activities that are undergone or undergoing in that unit. The procedure called Managerial Economics makes use of the economic theories and concepts, and thereafter assists managers to make rational decisions for the firm to develop and grow.

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