# Characteristics of Managerial Economics or Business Economics:
- Managerial Economics are Applied Economics.
- Managerial economics are perspective rather than descriptive.
- Managerial Economics studies only with the behavior of firm and not with the entire economy as a unit of study. Therefore, it is microeconomics in character.
- As we know environment is dynamic. It can change at any time. So, in order to understand and adjust with the environment in which the firm operates, it takes the help of Macroeconomics.
- Managerial Economics deals with the things in - sensible and realistic way rather than being limiting to theories. Therefore, managerial economics are 'Pragmatic'.
- Managerial economics are goal oriented. The firm may have several goal like : stability, efficiency, profitability, market share, expansion, sales maximization and so on. Managerial economics examines how economic theory, decision sciences and functional areas of business studies- interacts with each other to achieve the organizational goal.
- Science can either be positive science (what is?) or normative science (what ought to be?). Managerial Economics deals with only normative science.
- In managerial economics we find the coordination between different theory and practical aspects.
- Managerial economics are closely linked with - politics, statistics, econometrics, mathematics, finance, operational research, and other disciplines of study. Therefore, managerial economics is multidisciplinary.
- Managerial economics make wise choices among the available option. Managerial Economics is the integration of economic theory and decision science tools in business processes to find the optimal solution to managerial decision problems.
The main objective of Managerial Economics is to help the management in decision making. This is done through the integration of economic theory and decision science tools in business processes. Therefore, the optimal solution to managerial decision problems are easily found through the study of managerial economics.
Some of the role of managerial economics in business decision making are as follows:
- Preparation of Business Plan and Policies
- Useful for Demand Forecasting.
- Useful for Production Decisions.
- Useful for Inventory Management.
- Useful for Pricing Decisions.
- Useful for Investment Decisions.
- Useful for Human Resource Planning.
- Useful for setting Objectives of the Firms Strategy
- Useful for understanding the logic of customers, competitors and governmental moves
- Helps in Capital Management and so on.
Note :
Click on these links for -
- Managerial Economics or Business Economics
- Difference between Managerial Economics and Traditional Economics
- Is Sales Revenue Maximization Model is better than Profit Maximization Model
- Practical approach towards Profit Maximization and Boumol's Sales Revenue maximization Model
- Profit and Functions of Profit
- Practical Approach to Moving Average in Managerial Economics
- Case Study for Demand Forecasting
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