Scribd
Upload
191 views15 pages

Managerial Economics and Economist

hk singh business economics

Uploaded by

Khushi Mittal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
191 views15 pages

Managerial Economics and Economist

hk singh business economics

Uploaded by

Khushi Mittal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF or read online on Scribd
You are on page 1/ 15
per fea C PAR eg \ 1 MANAGERIAL ECONOMICS AND - ECONOMIST nomics is the systematic application a ‘cision-making and forward planning Too ness management. Managerial economics is also understood qo refer to business economics or applied economics or theory of firm, In aivomies, we include the analysis of theoretical aspects of economic events, which are generally based on certain hypothetical assumptions, whereas actual business is related to practical aspects of economic analysis. Business economics fills the gap between the economic theories and practical behaviour of the business. It lies at the border line of economics and business management and acts as bridge between these two branches of knowledge. This modern and specific branch of knowledge is also known by different nomenclature as Theory of the Firm, Economics of Enterprise, Economic Analysis for Business Decisions, Economics of Business Management ete. ‘After second world war, the subject of managerial economics is gaining popularity and its study is becoming very significant in the courses of Commerce, Management, Accounting, Engineering etc. According to famous economist Prof. Robbins, human resources are limited whereas needs and usage are unlimited. Resources can be utilized in various forms. Thus, for best optimum form of utilization, we have to select the best. In any business organisation, the prime function of managers are decision making and forward planning. The practical use of economic theories for decision-making and forward planning in the atmosphere of uncertainty is managerial economi Thus, it can be described asa stream of study that engulfs economic theory as well as with the principles of management. This is the basic reason for the fast popularity, which this discipline is'getting in the competitive world of management, day by day. This modern branch has attracted the serious attention of corporate sector towards it. The globalization and meltdown o this century has brought new challenges for managerial economics and in this state the role of economist and managerial economists is getting significan® inal over the world, The managerial economies is taking place of econom' ™ 21st century and importance is growing very fastly. = MEANING AND DEFINITIONS OF BUSINESS Econom! ves which . Business economies is that specific branch of general econewts Tp Joins the economic theories and business behaviour. This * pee ot buisioss. ®conomie science which is used in solving the practical proDemns Managerial Boo -¢, business and economics, ie, Due med with the prime i id 2 | Business an oe ies i de up © jch is perfor! ee 7 aaerest tivity which 1s Poa ctical activity. The Business econo! hee hat humal jness 8 4 P' y it to that hu “Fence, asines: * Ppudies the optimum a Business is mea 0) = esti cter an 5 7 ve eo tical chara he yarious.theories of nomics objecti' theoret ee 0 ‘ 3 According to Haynes, M Za hecording to s, Mote and Paul, economies applied in decision- : ridging the gap between ab managerial epee ae Berlal economics is the br: lon-making process, In th ory with “Managerial E ics i a E A conomics is ae It is a special branch of economics et theory and managerial practice.” This means eae fiom, the es which is used in the a , the eniphasis is gi rious toa ate ; is given on wate rman E Durie meaaly is for solving the business prob] oe aynes, Mote & Paul. Tm hig oo aeteoment regard she defn i ane rding the definitio : n serial economics j con know g ‘omics includes Nee to the Dusinessman ia hee Sy mitch s is decision- making,” 7] f the organisation. Now a days, the excessive profit gives rise to oth like criticism, governinent restri ; er problems prot ahoull bn emphasis in plac of exentive pees, Basins ive profit. Business economist should provide his services keepi Pr eeping the ay i in mi ~%. To make accurate forecastin; 71 The buses anand. 2. 3. 2 t 5. Analysis of agricul 6. 1 8. : sine: contacts so th ss econ contacts so that the useful conomie inforna ould have a wid . He should be ‘matio; ide ran; e i ; an acti n can ‘i ge of committees. His success is measured in? Member of Q * Provided to the usiness and social | necessa: 4 ry, complex | x | a and confidential information with spogqe ™® f Obtaining Managerial Economics and Economist | 15 To make the status respectable in the firm : It is also the Zonsibility of the business economist to make a respectable position in the a for himself through hard work, He should have the quality of performing fp with perfection and proptness, For explaining the situation, he should yse minimum technical words, and use easy and intelligent language so that vanager could easily understand. To conclude, it is clear in a developing country like India where the business economies services are considered to be a luxury, a business managers should discharge his duty with hard work and justify his position. In present ai** Century, the responsibilities of business economist are getting crucial. 0 OBJECTIVE OF BUSINESS FIRM ‘The central concept of objective of the business firm condtinues to be profit maximisation. Though there are growing reatizations that it is an over simplification, in todays world. Economists have not yet come up with deal and olegant models for grapping with choice problem regarding sole objective of firm. There are controvesy among economists about the question of objective ofthe firm. Profit maximisation has been assumed by conventional theory of firm to be sole objective of firm. However, some other important objectives are also presented by various economists. ~[* PROFIT MAXIMISATION Conventional theory of firm asumes profit maximisation as main objective of the fim However; Baumal has argued that there is no reason to belive that all business pursue the same objective. Profit is generally known as the excess income over expenditure or otherwise, itis the surplus from the residual cum left in business, which vary from industry to industry and from businessman to businessman. Profit maximisation assumption has a greater productive power. It helps in improving the behaviour of business firms in the real world and also behaviour of price and output under different market structures. Profit maximisation in economics is the process by which, a firm determines the price and output level that returns the greatest profit. There are various approaches regarding this problem. Marginal approach helps to formulate a rule which is applicable in most of the areas.The total revenue and toal cost method relies on the fact that profit equals to revenue minus COS I i i ct that tot@ and marginal revenue marginal cost method is based on the fa 7 mn to profit is perfectly competitive market and the fir reaches its maxi where marginal revenue equals marginal cost, crc, sonal Profit is equal to total revenue (TR) minus total cost (TO. YM eput oxi erofit = 7 fit mas Tot ‘Total cost. To obtain the pro tis Total Reve tT eB quantity, we may draw diagram. TC is ‘total cost aon io) is pat curve, At point B, the tangent on the total cost 07, (ao) #* an +0 total revenue curve (TR), the surplusof revenue ?° venut

You might also like