Managerial Economics

Managerial economics deals with the application of the economic concepts, theories, tools and methodologies to solve practical problems in business. It also refers to the application of economic theory (micro economics and macroeconomics) and tools of analysis of decision science.  Managerial economics is the combination of economics theory and managerial theory which helps the manager in making decision and act a bridge between practice and theory.

Economics are the science which studies about the production, distribution, and consumption of goods and services, in order word economics is normally combination of micro factors, so we can say managing those factors tactfully is called managerial economics. Managerial economics are the tools which solve production cost, demand cost, sales cost, human resources cost, marketing and financing cost.

Managerial economics is a special branch of traditional economics which bridge the gap between abstract theory and managerial practice. Managerial economics aids the organization in planning process which deals with utilization of limited resources to achieve the goals. It also decides future sales of the product. It only studies the economic factors.

Managerial economics basically deals with micro economic nature like individual unit, individual firm or product. It only deals with individual problem of individual unit, firm and product.