Managerial economics has its relationship with other disciplines for propounding its theories and concepts for managerial decision making.
Managerial
Economics And Other Disciplines
Managerial economics has its
relationship with other disciplines for propounding its theories and concepts
for managerial decision making. Essentially it is a branch of economics.
Managerial economics is closely related to certain subjects like statistics,
mathematics, accounting and operations research.
Managerial economics helps in estimating the
product demand, planning of production schedule, deciding the input
combinations, estimation of cost of production, achieving economies of scale
and increasing the returns to scale. It also includes determining price of the
product, analyzing market structure to determine the price of the product for
profit maximization, which helps them to control and plan capital in an
effective manner.
Successful mangers make good
decisions, and one of their most useful tools is the methodology of managerial
economics. Warren E Buffett, the renowned chairman and CEO of Berkshire
Hathaway Inc., invested $100 and went on to accumulate a personal net worth of
$30 billion. Buffett credits his success to a basic understanding of managerial
economics. Buffett’s success is a powerful testimony to the practical
usefulness of managerial economics.
Managerial economics has a very
important role to play by helping managements in successful decision making and
forward planning. To discharge his role successfully, a manager must recognize
his responsibilities and obligations. There is a growing realization that the
managers contribute significantly to the profitable growth of the firms.
We can conclude that managerial
economics consists of applying economic principles and concepts towards
adjusting with various uncertainties faced by a business firm.
Tags : Managerial Economics - The Fundamentals Of Managerial Economics
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