limitations of managerial economics
Answers
Economics is the building base of any country's development.And managerial economics is the importamt sector for developing the whole economical structure of that country.
Managerial economics usually deals with the application of theories ,concepts and tools to solve the real life business problems.
There are some drawbacks of this managerial economics too.Sometimes the business problems becomes very unique that the theories and methodologies becomes unable to solve the problem.
"The limitations of managerial economics are as follows:
(a)Managerial economics focus on management analysis based on financial and cost accounting data. Thus, the reliability of this data depends on the accuracy of the financial accounting information.
(b)Such analysis is based on past information. But if a new scheme is to be introduced, the circumstances change and the conclusions cannot be predicted using this past information.
(c)Managerial economics is subjected to the personal preferences of the individual manager which can influence the final decision of the manager to a certain extent.
(d)It is an expensive process as a business firm generally requires a certain number of managers to ensure proper functioning.
(e)The science of managerial economics is quite recent and is not fully developed. Thus, it is subjected to ambiguity in certain scenarios.
The manager is required to have extensive knowledge in a variety of fields in order to ensure that he completely comprehends the situation to be dealt with."