Business economics analyzes business situations using economic theories and concepts to facilitate managerial decision-making. It is microeconomic in nature as it focuses on individual business firms. Business economics uses microeconomic concepts like demand forecasting, cost-benefit analysis, and theories of the firm to examine pricing, production, costs, and profit maximization. It also employs tools from mathematics, statistics, and other disciplines to aid in evidence-based pragmatic decision-making. The goal is to provide practical guidance for establishing objectives and evaluating alternative solutions.

2. Meaning of Business
Economics

4. “Business economic consists of the
use of economic modes of thought to
analyse business situations.”
According to Mc Nair
and Meriamm

5. SPENCER AND SIEGELMAN
“the integration of economic theory
with business practice for the
purpose of
facilitating decision-making and
forward planning by management.”

6. Nature Of Business Economics
Business Economics is micro economic in
its nature because it deals with matters of a
particular business firm only.
Business Economics is more concerned
with the decision-making situations of
individual establishments.
Micro Economic Nature

7. •Price output relationship of perfectly
competitive firm
•Demand forecasting for a new product
•Law of returns to scale
•Law of demand
•Law of diminishing marginal
utility………………….

8. •Government policies – Public Finance
•International Trade
•Anti-monopoly measures
•Employment level
•National Income
Uses Macro Concepts

9. •Business Economics uses
all economic theories
relating to the profits,
distribution of income
etc
UsesTheories of
Firm

10. • Theory of firm states that the primary aim
of the firm is to maximize wealth. Decision
making in managerial economics generally
involves establishment of firm’s objectives,
identification of problems involved in
achievement of those objectives,
development of various alternative
solutions, selection of best alternative and
finally implementation of the decision.

11. It studies the matters concerning the aims
and objectives of a business firm.
It determines the methods to be adopted for
achieving such objectives.
It also makes enquiry into the good and bad
in decision making. – Example……. pricing
strategy
Normative Science

12. The philosophy of pragmatism is based on
the notion that an ideology, theory, or
proposition is true if it works in achieving the
desired outcome
It is not interested in mere theoretical
discussions but in practical application of the
theory.
Pragmatic

13. •The word "pragmatic" is often used to
describe a decision-making theory
that is entirely built on empirical data.
•It examines the outcomes of decisions
by digging deep into the details of the
decision-making process leading to a
logical, successful result

14. Tools of Mathematics, statistics and
operational research, Accounts, Finance in
decision making and forward
planning………… econometrics…- example
methods of demand forecasting.
Uses ModernTools/Multi-
disciplinary

15. Human and Behavioural factors,
Environmental factors( Environmental laws),
technological consideration that influences
business decisions
Gives importance
to non economic
consideration

16. Culture, religion, the role of family, class,
tradition, role of the individual, social and
political dependence, the role of overnment,
religion, language as a resource of human
capital, corruption, factors that belong to
the social pathology. of economic freedom

17. •Some other variables also used
in modern economic empirical
research are democracy, rule of
law, the state share of
spending in the economy, legal
structures……………

18. Conclusion
•Business economics is useful because:
•(i) It provides tools and techniques for
managerial decisions,
• (ii) It gives answers to the basic
problems of business management,
•(iii) It supplies data for analysis and
forecasting

19. Conclusion
•(iv) It provides tools for demand
forecasting and profit planning,
• (v) It guides the managerial
economist.Thus, Business economics
offers a number of benefits to
business managers.
• It is also useful to individuals, society
and government( decision making, Profits…).