Scope of Managerial Economics The scope of managerial economics is narrower than economic theory because economics is related to both micro and macro economics whereas the scope of managerial economics is limited to micro analysis. However, it is closely related to operation research like mathematics and decision making theory. There are various functional areas of … Read more
Relationship between Management Economics and Other Subjects (i) Management Economics and Operations Research- Management Economics and Operations Research both are related to effective decision making. Both are related to the best way of achieving goals. After the Second World War, many researches were done to solve the complex problems of planning and allocation of resources. … Read more
Nature of Managerial Economics Managerial economics is closely related to business firms. It solves problems which are often faced by business firms. The objective of managerial economics is described as the application of economic principles to business management. It provides a bridge between theory and practice. The nature of managerial economics can be explained as … Read more
Role of managerial economics in decision making or importance of managerial economics Today business and society are going through a phase of economic and industrial revolution. Its first component is globalization of markets. Globalization today does not mean exporting some goods and services to other countries. At present, globalization means considering the world as a … Read more
Definition and Scope of Management Economics Managerial economics is viewed as a branch of economics which is applied to the problem of choice. It is the study of the distribution of resources available to a firm or a unit of management. This does not mean that managerial economics provides readymade or predetermined solutions to business … Read more
Broadly speaking, production function can be classified under two heads: 1.Fixed proportions production function, and 2.Variable proportions production function Under the former the productive factors are combined together in certain fixed proportions. For example, the firm may employ 100 workers to produce an output of1000 units.This proportion is faced and cannot be varied by substitut- … Read more
Production changes with period of time. In long run, there are various choices available with the producer to make required changes. However, in short run, the choices open to the producer are restricted because some factors are fixed and they can not be changed in the short period. In this situation, production function helps the … Read more
What does the term Production mean? This is in fa some activity of making. In economics, production is th creation of utility in any form. In economics, by productior we mean the process by which man utilises or converts th natural resources, working upon them so as to make ther satisfy, human wants. Satisfaction of … Read more
1. Price Fixation under Imperfect Competition and Monopoly – The individual producer under imperfect competition has to consider the elasticity of the demand for his product when he fixes its price. Likewise, the monopolist has to study the elasticity of demand of his commodity before he fixes its price. If his product happens to have … Read more
The concept of elasticity of demand is generally associated with the name of Alfred Marshall who had done much to develop it. Law of Demand explains the direction of change in demand. A fall in price leads to an increase in quantity demanded and vice versa. But it does not tell us the rate at … Read more