Case Study Warren Agency, Inc.

In: Business and Management

Submitted By gemmacruz
Words 33751
Pages 136
BACHELOR OF COMMERCE (B.COM.,)

PAPER – 2.1

MANAGERIAL ECONOMICS

UNIT – I

CHAPTER - I

SECTION - I

Definition of Managerial Economics

Managerial economics refers to those aspects of economics and its tools of analysis most relevant to the firm’s decision-making process. According to MeNair and Meriam, managerial economies consists of the use of economic models of thought to analyze business situations. Some writers consider managerial economics as the integration of economic theory with business practice for the purpose of facilitating decision-making and forward planning by management. The underlying idea of all these definitions is that managerial economics means economics applied in decision-making. So we may consider managerial economics as a special branch of economics bridging the gap between abstract theory and managerial practice.

It may be pointed out here that effective decision-making at the firms’ level calls for a careful analysis of a choice between alternative courses of action. Economic theory offers a variety of concepts and analytical tools which can be of considerable assistance to the manager in his decision-making process. In fact actual problem-solving may require many skills and tools which are not available in the traditional economist’s. For example, knowledge of accounting and of statistical concepts and methods, which are not taught in economics, can help the analyses to apply more effectively the economic tools in a concrete situation. The problems of industrial management do not neatly fall into one academic discipline or another. Rather they tend to out across different disciplines.

Managerial economics is pragmatic, it is concerned with analytical tools that are useful, that have proven themselves in practice, or that promise to improve decision – making in the future. In the attempt…...

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