Introduction To Managerial Economics
<ul><li>What is Economics? </li></ul><ul><li>It is a logic of choice. </li></ul><ul><li>An art of rational decision making...
<ul><li>Definition   : </li></ul><ul><li>“Managerial economics is the integration of economic theory with business practic...
Nature of Managerial Economics. <ul><li>ME is micro in character. </li></ul><ul><li>ME takes the help of macro economics. ...
Scope of Managerial economics <ul><li>ME applied to operational areas </li></ul><ul><li>Theory of demand </li></ul><ul><li...
<ul><li>(B)  Environmental / external issues </li></ul><ul><li>Economic System of the country </li></ul><ul><li>General tr...
Some Basic Concepts <ul><li>Markets </li></ul><ul><li>Firm and Industry </li></ul><ul><li>Expenses and Losses </li></ul><u...
Risk & Uncertainty <ul><li>(A)  Risk : A low probability of an expected outcome (in common) </li></ul><ul><li>From busines...
Upcoming SlideShare
Loading in …5
×

Intro

812 views

Published on

Published in: Technology, Economy & Finance
1 Comment
0 Likes
Statistics
Notes
  • Be the first to like this

No Downloads
Views
Total views
812
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
29
Comments
1
Likes
0
Embeds 0
No embeds

No notes for slide

Intro

  1. 1. Introduction To Managerial Economics
  2. 2. <ul><li>What is Economics? </li></ul><ul><li>It is a logic of choice. </li></ul><ul><li>An art of rational decision making. </li></ul><ul><li>Maximising / Optimising behaviour </li></ul>
  3. 3. <ul><li>Definition : </li></ul><ul><li>“Managerial economics is the integration of economic theory with business practice for the purpose of facilitating decision making and forward planning by the management”. By Spencer & Siegelman </li></ul>
  4. 4. Nature of Managerial Economics. <ul><li>ME is micro in character. </li></ul><ul><li>ME takes the help of macro economics. </li></ul><ul><li>ME is normative rather than positive in character </li></ul><ul><li>ME is prescriptive rather than descriptive </li></ul><ul><li>It is both conceptual and metrical </li></ul><ul><li>It helps in making wise choices. </li></ul>
  5. 5. Scope of Managerial economics <ul><li>ME applied to operational areas </li></ul><ul><li>Theory of demand </li></ul><ul><li>Theory of production and production decisions </li></ul><ul><li>Analysis of market structure and pricing theory </li></ul><ul><li>Profit analysis and profit management </li></ul><ul><li>Theory of capital and investment decisions </li></ul><ul><li>Objectives of the business firm </li></ul>
  6. 6. <ul><li>(B) Environmental / external issues </li></ul><ul><li>Economic System of the country </li></ul><ul><li>General trends in production, prices, employment, income, savings, investment etc. </li></ul><ul><li>Structure of financial institutions </li></ul><ul><li>Magnitude of and trends in foreign trade </li></ul><ul><li>Trends in capital and labour markets </li></ul><ul><li>Government policies </li></ul><ul><li>Degree of openness of the economy etc </li></ul>
  7. 7. Some Basic Concepts <ul><li>Markets </li></ul><ul><li>Firm and Industry </li></ul><ul><li>Expenses and Losses </li></ul><ul><li>Revenue and Profit </li></ul><ul><li>Cost concepts </li></ul><ul><li>Profit concept </li></ul><ul><li>Lay man’s profit </li></ul><ul><li>In accounting sense </li></ul><ul><li>In economic sense </li></ul><ul><li>Risk and Uncertainty </li></ul>
  8. 8. Risk & Uncertainty <ul><li>(A) Risk : A low probability of an expected outcome (in common) </li></ul><ul><li>From business decision making point of view, risk refers to a situation in which a business decision is expected to yield more than one outcome and the probability of each outcome is known to the decision maker and can be reliably estimated. </li></ul><ul><li>(B) Uncertainty : It refers to a situation in which there are more than one outcome of a business decision and the probability of no outcome is known or can be meaningfully estimated. </li></ul><ul><li>Due to  Reliable market information </li></ul><ul><li> Inadequate past experience </li></ul><ul><li> High volatility of market conditions </li></ul>

×