Introductory issue of Managerial Economy

1. Welcome to Presentation

2. Presentation On
Introduction to Managerial
Economics

3. Group Members ‘A’
SL NAME ID
01 Md. Rifat Hasan 1406002
02 Masud Rana 1406017
03 Md. Polash Mia 1406018
04 Md. Mizanur Rahman 1406025
05 Shamim Hossain 1406032
06 Most. Jannatul Ferdoush 1406052
07 Sums Zarin 1406059
08 Shahin Ali 1406060
09 Md. Rafiqul Islam 1306034

4. INTRODUCTION
• Emergence of managerial economics as a separate
course of management studies can be attribute to at
least three factors :
a. Growing complexity of business decision making
process due to changing market conditions and
business environment.
b. The increasing use of economic logic , conceptual
theories and tools of economic analysis in the
process of business decisions making process.
c. Rapid increase in demand for professionally
trained managerial power.

5. Definition of Economics
• Economics is the science of making decisions in
the presence of goods or service to achieve a
goal. Economic decisions involve the allocation
of managerial decision varies depending on the
goals of the manager.
• A manager is a person who directs resources to
achieve a stated goal and he/she has the
responsibility for his/her own actions as well as
for the actions of individuals , machines and
other inputs under the managers control.

6. Managerial Economics
• Managerial economics is the study of how scarce
resources are directed most efficiently to achieve
managerial goals .It is a valuable tool for analyzing
business situations to take better decisions.
• Managerial economics can be broadly defined as the
study of economic theories ,logic and tools of economic
decision making .Economic theories and techniques of
economic analysis are applied to analyze business
problems , evaluate business options and opportunities
with a view to arriving at an appropriate business
decisions.

7. Market
Conditions
Factor
Prices
Economic
Conditions
Managerial
Problems
Managerial Decision
Company’s
Performance
Market
Conditions

8. Managerial Economics & Theory
• Managerial economics applies macroeconomics
theory to business problems.
• How to economic analysis to make decisions to
achieve firm’s goal of maximization.
• Economic theory helps managers understand real
business problems.
• Uses simplifying assumptions to turn complexity
into relative simplicity.

9. Nature of Managerial Economics
• Close to microeconomics
• Operates against the backdrop of macroeconomics
• Normative Statement
• Prescriptive Actions
• Applied Nature
• Offer scope to evaluate each alternative
• Interdisciplinary

10. Scope of Managerial Economics
• Demand decisions
• Input-output decisions
• Price-output decisions
• Investment decisions
• Analysis of Business environment

11. Importance of Managerial Economics
• Basis of business policies
• Predicting economic qualities
• Estimating economic relationship
• Helpful in understanding the external forces
constituting the environment.
• Reconciling theoretical concepts of economic in
relation to the actual business behavior and
conditions.

12. Relationship of Managerial Economics
with other Disciplines
• Economic and Econometrics
• Mathematics and Statistics
• Operational Research(OR)
• Accountancy
• Psychology and Organizational Behavior(OB)
• Management Theory

13. Traditional Managerial
It has Micro and Macro aspects Micro aspect
It is both positive and Normative science Normative in nature
It deals with theoretical aspect Practical aspect
It studies human behavior or certain
assumptions
No assumptions
We study Economic aspects of the
problem
Both economic and non-economic
aspects
Studies principles underlying rent, wages
, interest and profits
Only the principles of profit
Limited scope Wide scope
Difference between Managerial Economics
or Industrial/Traditional Economics

14. Managerial Economics as a Tool for
Decision Making and Forward Planning
• Business decision making is influenced not only by
economic considerations but also by human
behavioral and environment ,technological and
environmental factors due to growing public
awareness .
• “Decision making and processing information are
two important tasks of managers”
• In order to make good decisions managers must be
able to obtain process and information.

15. Forward Planning
• Future is uncertain. A firm is operating under
the conditions of risk and uncertainly can be
minimized only by making accurate forecast and
forward planning.
• Managerial economics helps manager in forward
planning means making plans for the future.

16. THANKS TO ALL !!!