Managerial Economics Crash Course (ePub)

Early traders dealt with competition on a relatively smaller scale
as we do today. Most businesses were run mainly on the
business acumen and knowledge of the trader without much
study about the theories that ruled the world of business. While
Economics has existed as a branch of knowledge since the
ancient era, managerial economics is an emerging branch of
economics which integrates business theories with practical
business applications.
In early days when business was less competitive, the
application of economics to business was not considered to be
important. But with the considerable amount of changes in the
business landscape, and the cut-throat competition that
dominates every aspect of business makes it important for
business leaders in today's world to understand economic
theories and apply it prudently to the business to ensure steady
growth and profits and to achieve the desired business goals.
Managerial Economics helps business leaders take managerial
decisions in an informed manner by basing their decisions on
the principles of economics. Almost any business decision can
be taken with the help of managerial economics. While some
businesses may utilize the study of managerial economics and
have the leaders directly apply the knowledge to their business
decisions, other businesses may employ a managerial economist
who assists the business in taking decisions.
Introduction
Managerial economics creates a bridge between the theories of
economics and practical application of these theories in the
actual business environment. Business leaders are studying
managerial economics because this branch of economics helps
in providing them with the ability of ensuring the smooth
functioning of the business by effectively applying economic
theories to the business.
Managerial Economics started gaining traction after Joel Dean
published the book "Managerial Economics" in 1951. The
ideology behind managerial economics is that economics gives
the tools while managerial economics gives the insight of
utilizing these tools in any business. It is meant to aid business
leaders in handling the problems of management in an effective
way.
Economics is considered to be one of the most advanced social
sciences because it includes clearly defined theories and
theoretical structures. Managerial theory in economics refers to
the theories and application of theories which directly impact
businesses and the decision making processes in management.