Managerial economics uses economic theory and quantitative methods to help businesses make decisions. It draws from microeconomics to analyze individual firms and industries, and aims to provide effective frameworks for management decision-making, planning, and goal setting. The scope of managerial economics is broad, covering areas like demand analysis, production and cost analysis, inventory management, pricing, resource allocation, and capital budgeting. It seeks to integrate economic theory with business practice to facilitate optimal business decision-making.