Nature of Managerial Economics
Managers study managerial economics because it gives them insight to reign the functioning of the organization. If manager uses the principles applicable to economic behaviour in a reasonably, then it will result in smooth functioning of the organisation.
Managerial Economics is a Science
Managerial Economics is an essential scholastic field. It can be compared to science in a sense that it fulfils the criteria of being a science in following sense:
Managerial Economics requires Art
Managerial economist is required to have an art of utilising his capability, knowledge and understanding to achieve the organizational objective. Managerial economist should have an art to put in practice his theoretical knowledge regarding elements of economic environment.
Managerial Economics for administration of organization
Managerial economics helps the management in decision making. These decisions are based on the economic rationale and are valid in the existing economic environment.
Managerial economics is helpful in optimum resource allocation
The resources are scarce with alternative uses. Managers need to use these limited resources optimally. Each resource has several uses. It is manager who decides with his knowledge of economics that which one is the preeminent use of the resource.
Managerial Economics has components of micro economics
Managers study and manage the internal environment of the organization and work for the profitable and long-term functioning of the organization. This aspect refers to the micro economics study. The managerial economics deals with the problems faced by the individual organization such as main objective of the organization, demand for its product, price and output determination of the organization, available substitute and complimentary goods, supply of inputs and raw material, target or prospective consumers of its products etc.
Managerial Economics has components of macro economics
None of the organization works in isolation. They are affected by the external environment of the economy in which it operates such as government policies, general price level, income and employment levels in the economy, stage of business cycle in which economy is operating, exchange rate, balance of payment, general expenditure, saving and investment patterns of the consumers, market conditions etc. These aspects are related to macro economics.
Managerial Economics is dynamic in nature
Managerial Economics deals with human-beings (i.e. human resource, consumers, producers etc.). The nature and attitude differs from person to person. Thus to cope up with dynamism and vitality managerial economics also changes itself over a period of time.
- Managerial Economics - Introduction
- Scope of Managerial Economics
- Managerial and Micro Economics
- Principles of Managerial Economics
- Role of a Managerial Economist
Authorship/Referencing - About the Author(s)
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