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Managerial Economics

Importance of Managerial Economics

Managerial economics is the study of that part of the economic theory which helps the mangers to take the rational decisions. It's a subject that bridges the gap between the economics theories and business practices. It's a subject of applying the concept when there is constraint; it helps the managers to take the rational decision with the changes in the economic environment.

The importance of managerial economics as a field of study is that it studies the concepts such as demand analysis estimation, production and cost analysis, pricing theory and policies, capital budgeting for investment decisions etc. the subject is not about the learning of these concepts nut it also about how to apply them in real word problem faced by the managers, which make this subject a part applied economics. For example- if there is a sudden drop in the demand for a product of a firm than the managerial economics will help the managers to find the reason for this, it may be due to the change in the taste and preferences of the customer or the presence of substitute good of a different firm. It helps the managers in deciding the price for a product the price should be such that it covers both the fixed cost and the variable cost of the firm, where the fixed cost is the cost related to long term expenses like machinery, land, building etc, and variable cost is the expenditure on the good which are short term in nature like rent, salaries to labor etc. The managerial economics helps mangers to find the minimum cost at which the firm can keep on running which is also known as breakeven point-

                                                Price = Average Variable Cost (AVC)       


Why is it difficult to solve managerial economics problems?

Managerial economics is the study of how scarce resources are directed efficiently to achieve the managerial goals. The main problem faced by the students in managerial economics is to see if the decisions of the firm or the economics really helping the firm in its objectives which are-

  • To achieve the organization goal
  • To maximize the output
  • To maximize sale
  • To maximize profit
  • To maximize the satisfaction of the customers and the people who have invested their money in the firm
  • To maximize the growth of the firm

Therefore it is the main objective of the student studying managerial economics to combine the business practices/managerial decisions with the economic concepts and find out that optimal decision which fulfills the objectives of the firm. Managerial economics is an applied economics subject where the economics concept are used to find out the best managerial decision which are profitable for the firm, therefore students who yet not understand the concept of economics and the assumptions used to prove those concepts can face a lot of problem in managerial economics.

Few important tips to solve problems of Managerial economics

Managerial economics is used to meet the objective of the firm therefore the first most important tip to the students facing problem in managerial economics is to understand the objective of the firm and why they are necessary for the survival of the firm. Managerial economics helps managers to make the rational decision; therefore student must understand the concept of rational decision which is the decisions that are generally acceptable for the growth of the firm. Another tip that can help students in solving managerial problems -

  • Define the problem
  • Determine the objective
  • Discover the alternatives
  • Forecast the consequences
  • Make a choice.

Live economics writers support 24x7 - managerial economics assignment help

Live writer support for managerial economics is the help provided by us to the students who are studying managerial economics and facing problems in understanding the concepts related to managerial economics. Managerial economics is the study of the concepts related to economics therefore having a support can help the students to not give up on the subject. Live support is the service which is available 24x7 to the students; where the experts are working all around the clock and any problem of the students can be solved by sending just an email to us at any point of time. 

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