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Managerial Economics (BCOM)- Module I
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Managerial Economics (BCOM)- Module I
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9/13/24, 9:50 Managerial Economics (BCOM)-AM Module I
Module I (Introduction)
Definition of Economics
• Wealth Definition
• Welfare Definition
• Scarcity Definition
• Growth Definition
• Wealth Definition
According to Adam’s Smith, “Economics is the study of wealth,
how wealth is produced and distributed.”
• Welfare Definition
According to Alfred Marshall, “Economics is the study of mankind in
the ordinary business of life.”
• Scarcity Definition
According to Lionel Robbins, “Economics is the science which
studies human behaviour as a relationship between ends
and scarce means which have alternative uses.”
• Growth Definition
Economics is the study of how people and society end up
choosing with or without the use of money to employ
scarce productive resources that could have alternate
uses to produce various commodities and distribute them
for consumption, now or in the future, among various
persons or groups in the society.
Managerial Economics
According to Spencer and Sieglman, “Managerial economics is
the integration of economic theory with business management
for the purpose of facilitating decision making and forward
planning by management.”
Objectives of managerial economics
• To integrate economic theory with business practices.
• To minimize risk and uncertainty.
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, 9/13/24, 9:50 Managerial Economics (BCOM)-
AM Module I
• To help in profit maximization.
• To helps in demand and sales forecasting.
• To make all round development of a firm.
• To apply economic concept to solve business problems.
Nature/Characteristics of Managerial economics
• It is micro economic in nature.
• It also relies on macro-economics.
• It is pragmatic.
• It is normative.
• It is management oriented.
• It is multidisciplinary.
Importance of managerial economics
• It provides tool and techniques for managerial decision making.
• It guides the managerial economists.
• It helps in formulating business policies.
• It is a tool for demand forecasting.
• It is a tool for profit planning.
• It supplies data for analysis and forecasting.
Managerial economist
Managerial economist is a person who manages business
efficiently using various economics theories and
methodologies. He support management team in better
decision making through analytical skill and specialized
knowledge.
Functions of Managerial Economist
• Sales forecasting
• Market research
• Production scheduling
• Investment appraisal
• Environmental forecasting
• Security management analysis
• Advise on foreign exchange management.
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