nature and characteristic of managerial economics

nature and characteristic of managerial economics  

to understan the natare of me we should understand what is me .here is qiuck defination of managerial economics -:so its application of the practical solution of economic issues. which is applied in decision making future planning, soon.

managerial economics is concerned to be applied micro economic .it mean managerial economic is concerned with the application of micro economics principle of dicision making by the firm so, the managerial economic short to be covered the following points -:

a)decision variable of firm  

b)micro economic principles 

c)technique from a decision science

   

so it was all about the short definition of managerial economics so lets talk about its nature and characteristics of managerial economics 

a)managerial economic is principle rather than descriptive 

b)it is the character of micro economic issues

c)it is a scientific art because all decision is based on what, how and to whom

d)it is a normative science 

so this is all about nature of managerial economic now lets define it briefly 

SHADAB AHMAD

1. Normative: Managerial economics belongs to normative economics rather than positive economics. In other words, it is prescriptive rather than descriptive. The main body of economic theory confines itself to a descriptive hypothesis, attempting to generalize about the relations among different variables without judgment about what is desirable or undesirable. Managerial economics firstly tells what aims and objectives a firm should pursue and secondly, it tells how best to achieve these aims in particular situations.
2. Micro economic character: Managerial economics is micro economic in character because it is a unit of study i.e. firm. It only deals with the problems of firms but not deal with the entire economy as a unit of study. However, it takes the help of macroeconomic to understand and adjust to the environment in which the firm operates.

Nature of Managerial Economics:

1. It helps in decision making and forwards planning.

2. The problem of choice arises because resources are limited and the firm has to make the most profitable use of these resources.

3. As the future is unpredictable, a business manager’s task is to prepare the best possible plans for the future depending on past experience and future outlook. 

4. The way economic analysis can be used towards solving business problems constitutes the subject-matter of Managerial Economics.

Hope it helps. Thank you!