Managerial Economics Crash Course - E-book - ePub

Early traders dealt with competition on a relatively smaller scaleas we do today. Most businesses were run mainly on thebusiness acumen and knowledge of the trader without muchstudy about the theories that ruled the world of business. WhileEconomics has existed as a branch of knowledge since theancient era, managerial economics is an emerging branch ofeconomics which integrates business theories with practicalbusiness applications.
In early days when business was less competitive, theapplication of economics to business was not considered to beimportant. But with the considerable amount of changes in thebusiness landscape, and the cut-throat competition thatdominates every aspect of business makes it important forbusiness leaders in today's world to understand economictheories and apply it prudently to the business to ensure steadygrowth and profits and to achieve the desired business goals.
Managerial Economics helps business leaders take managerialdecisions in an informed manner by basing their decisions onthe principles of economics. Almost any business decision canbe taken with the help of managerial economics. While somebusinesses may utilize the study of managerial economics andhave the leaders directly apply the knowledge to their businessdecisions, other businesses may employ a managerial economistwho assists the business in taking decisions.
IntroductionManagerial economics creates a bridge between the theories ofeconomics and practical application of these theories in theactual business environment. Business leaders are studyingmanagerial economics because this branch of economics helpsin providing them with the ability of ensuring the smoothfunctioning of the business by effectively applying economictheories to the business. Managerial Economics started gaining traction after Joel Deanpublished the book "Managerial Economics" in 1951.
Theideology behind managerial economics is that economics givesthe tools while managerial economics gives the insight ofutilizing these tools in any business. It is meant to aid businessleaders in handling the problems of management in an effectiveway. Economics is considered to be one of the most advanced socialsciences because it includes clearly defined theories andtheoretical structures. Managerial theory in economics refers tothe theories and application of theories which directly impactbusinesses and the decision making processes in management.