Objectives, difference and significance of economics

1. Objectives of Business Economics
Introduction: Being able to compete and stay in business requires an understanding of the
dynamics of your market, competitors and customers. This is where an understanding of
business economics comes in handy. Business economics have several economic
objectives for their companies to overcome these competitions and they are
Make a profit: Making a profit is the core objective when running a company. A business
must make a profit that produces a reasonable return on shareholders' equity investment and
provides funds for growth.
Grow and develop the business: Businesses cannot remain stagnant; they must grow to
provide funds for expansion and offer more benefits for employees.
Maintain a regular supply of goods and services: Managers coordinate sales forecasts with
orders for materials, setting manpower levels and scheduling production.
Plan for long-term survival: Plan for the future. Firms rise above the rest because they can
sell more products, manage production more efficiently and control expenses better than their
competitors.
Optimize the use of resources: Business economics looks for the best use of resources. This
includes labour, capital, cash and fixed assets.
Improve labour utilization: Workers are most productive when they feel they are being
adequately compensated, improving their skills in jobs and have a secure future for
employment. The goal is to create an atmosphere where workers want to contribute their best
performance to the benefit of the organization.
Minimize risks: Evaluate market factors using economic analysis for better forecasting and
more accurate assessments of risks.
Conclusion: Managers develop strategies to reach their long-term economic objectives. They
apply the theories and methods of Business economics to the implementation and execution
of their strategies and estimate the probability of success. Business economics is used to
analyze the risks of business decisions and as a method to identify and quantify the
uncertainties in a situation.

2. Difference between Economics and Business Economics
Significance of Business Economics
Business economics plays an important role in decision making in an organisation. Decision
making is a process of selecting the best course of action from the available alternatives. In
order to make sound decisions; managers must have in-depth knowledge of economic
concepts, theories, and tools. The following points explain the importance of business
economics: ‰
 Business economics covers various important concepts, such as demand and supply
analysis; short and long-run costs; and marginal utility. These concepts support
managers in identifying and analysing problems and finding solutions. ‰
 It helps managers to identify and analyse various internal and external business
factors and their impact on the functioning of the organisation. ‰
 Business economics helps managers in framing various policies, such as pricing
policies and cost policies, on the basis of economic study and findings. ‰
 By studying various economic variables, such as cost production and business capital,
organisations can predict the future. ‰
 Business economics helps in establishing relationships between different economic
factors, such as income, profits, losses, and market structure. This helps in guiding
managers in effective decision making and running the organisation.