Traditional Economics is the social science that is related to production, distribution and consumption of goods and services. It deals with the- individuals, business, firm, government and nations. It makes choices on allocation of resources to satisfy wants and tries to determine how these groups should organize and coordinate their efforts to gain maximum output.
Managerial Economics refers to the application or use of economic theory and decision science tools (mathematical, econometrics) to find the solutions to managerial decision problems. In simple words, it is the integration of economic theory in business processes. It provides optimal solution to managerial decisions problems.
Traditional Economics has both micro (focusing upon individual consumers) and macro (focuses upon aggregate economy) aspect but, Managerial Economics generally considers micro aspect.
Traditional Economics deals with positive (objective and fact based- study of what is) as well as normative science (subjective and opinion based- study of what ought to be ) whereas, Managerial Economics deals with normative science.
Traditional Economics deals with theoretical aspect whereas, Managerial economics deals with practical aspect.
Traditional Economics studies the activities of micro and macro position whereas, Managerial Economics studies individual firm or unit.
There are a lot of assumptions in Traditional Economics but there are few assumptions in Managerial Economics.
Traditional Economics studies economic behavior of the situation. but Managerial Economics studies both economic and non-economic behavior of the situations.
Traditional Economics has very wide scope. whereas, Managerial Economics has lower scope then traditional economics.
Traditional Economics is the study of overall subject matter of economics whereas Managerial Economics is the study of application of economics in getting managerial decisions.
Note :
Click on these links for -
Note :
Click on these links for -
- Managerial Economics or Business Economics
- Characteristics of Managerial economics and Role of Managerial Economics in Business Decision Making
- Is Sales Revenue Maximization Model is better than Profit Maximization Model
- Practical approach towards Profit Maximization and Boumol's Sales Revenue maximization Model
Practical Approach to Accounting Cost and Economic Cost
- Case Study for Demand Forecasting
