Managerial Economics Related With Other Disciplines

MANAGERIAL ECONOMICS RELATED WITH OTHER DISCIPLINES

Managerial Economics and Traditional Economics

Economics and Managerial economics both are facing identical problems,i.e., problem of scarcity and resource allocation. Since labour and capital are always limited it must find way for effective utilizing of these resources.

MANAGERIAL ECONOMICS AND OPERATIONS RESEARCH

Both operations research and managerial economics are concerned with taking effective decisions, managerial economics is a fundamental academic subject which seeks to understand and to analyse the problems of business decision making while OR is an activity carried out by functional specialist within the firm to help the manager to do his job of solving decision problems.

ITS MAIN CONTRIBUTION TO MANAGERIAL ECONOMICS

OR models like queuing,linear programming etc.., are widely used in managerial economics Model building, economic models are more general and confined to broad economic decision making

MANAGERIAL ECONOMICS AND MATHEMATICS

Mathematics is closely related to managerial because managerial economics ,being conceptual but also metrical.Its metrical property is used to estimate and predict the relevant economic factors for decision making and forward planning

ITS MAIN CONTRIBUTION TO MANAGERIAL ECONOMICS

Geometry, algebra and calculus

Logarithms and exponential, vectors and determinants,input-output tables etc.,

Even OR can be included as a part of mathematical exercise

Statistics is widely used in managerial economics. It is mainly needed for a correct judgement and decision making

ITS MAIN CONTRIBUTION TO MANAGERIAL ECONOMICS

To handle the unforeseen circumstances the theory probability is mainly used.

MANAGERIAL ECONOMICS AND THE THEORY OF DECISION MAKING

The theory of decision making is relatively a new subject that has significance for managerial economics. Much of economic theory is based on the single goal MAXIMISATION OF PROFIT, but theory of decision making recognizes the multiplicity of goals and the pervasiveness of uncertainity

ROLE OF MANAGERIAL ECONOMIST IN BUSINESS

The task of organizing and processing information and then making an intelligent decision based upon two general forms

·        Task of making Specific decisions

·        Task of making General decisions

Specific decisions include

·        Production scheduling

·        Demand forecasting

·        Market research

·        Economic analysis of the industry

·        Investment appraisal

·        Security management appraisal

·        Advice on trade

·        Advice on foreign exchange management

·        Pricing and related decisions

General decisions include

·        Analysing the general economic condition of the economy

·        Analyzing the demand for the product

·        Analysing the general market condition of the economy