Question

Why are economic theory and itss methods used in managerial division making?

Answer 1

Economic theory reference to the aim and principles which tell us about how economy work....

economic theory plays an important role in decision making of management..

THE ROLE OF MANAGERIAL ECONOMICS IN MANAGERIAL DECISION MAKING Managerial economics uses economic concepts and decision science techniques to solve managerial problems.

Answer 2

Explanation:

Managerial economics deals with the application of the economic concepts, theories, tools, and methodologies to solve practical problems in a business. In other words, managerial economics is the combination of economics theory and managerial theory. It helps the manager in decision-making and acts as a link between practice and theory. It is sometimes referred to as business economics and is a branch of economics that applies microeconomicanalysis to decision methods of businesses or other management units.

• As such, it bridges economic theory and economics in practice. It draws heavily from quantitative techniques such as regression analysis, correlationand calculus.

• If there is a unifying theme that runs through most of managerial economics, it is the attempt to optimize business decisions given the firm's objectives and given constraints imposed by scarcity,

for example through the use of operations research, mathematical programming, game theoryfor strategic decisions, and other computational methods.