Answer to Question #90905 in Economics of Enterprise for patrick mwila

Question

Discuss the nature and scope of managerial economics

Answer 1

Economics is a social science, which studies human behavior in relation to optimizing allocation of available resources to achieve the given ends. Brighman and Pappas define managerial economics as,” the application of economic theory and methodology to business administration practice”. It involves an application of Economic theory – especially, micro economic analysis to practical problem solving in real business life. It is essentially applied micro economics. It explores and enhances economic mindfulness and awareness of business problems and managerial decisions dealing with Demand Analysis and Forecasting, Cost Analysis, Production and Supply Analysis, Pricing Decisions, Policies and Practices, Profit Management, and Capital Management