illustrate with examples the role of managerial economics in shaping business decision
Answers
Managerial economics deals with applying the principles of economics into practical business. Under this, business decisions related to funds, what product to deal with, production, sales and advertisement decisions are taken. Moreover, analysis related to costs, production, budgets, etc. is done.
For example -The economist decides here, what to produce, how much to produce and with how much cost, how to advertise and where to advertise.
Managerial economics helps in shaping business decisions in the following ways:
*Choosing the best option from various alternatives available
*Determining appropriate pricing and price strategies for the products and services offered
*Conducting an in-depth research on the industrial market
*Helping the management to take the right decisions regarding the internal functioning of the business
*Getting economic information such as competitor’s price and tax rates