The information analysis is enabled in the pattern of business management. Since managerial economics is concerned with such aspects and tools of analysis, it is pertinent to the decision making process. The branch of economics is applied in the analysis of all type of business decisions made in the firm or an organization. It is important in managing business problems in different departments of design, development, production, distribution, etc. In fact, price is the genesis of the revenue of a firm ad as such the success of a business firm largely depends on the correctness of the price decisions taken by it. It helps in formulating logical managerial decisions. It also enables the optimization of business decisions along with the involvement of effective forward planning. It helps in assisting cost control and profit planning methods that helps in the increase of business profits. In doing so, managerial economics is of great importance for a business manager. It makes use of economic theory and concepts. Its main objective is to solve different problems of the business by analyzing variant business situations and the factors that contributes in a environment in which the business operates. So, the decision making should be done on the basis of past data or the approximated future data. These factors are associated with business operation, knowledge of these factors aids the management in making sound business decisions. It plays effective role in managing the forward planning and decision making in the internal operations of the business. These factors can broadly be divided into two categories. The decision making and management cannot be separated. In this regards, the decision making plays a significant role for the managers so that the process can demand estimated and successful forecasts of sales before the production activity carried out. The very important aspect of managerial economics is that it tries to find out the cause and effect relationship by factual study and logical reasoning. Managerial Economics assists the managers of a firm in a rational solution of obstacles faced in the firm’s activities. Managerial Economics 3 more alternatives. The managerial economics covers certain aspects including profit policies and different techniques of profit planning including break-even-analysis. The objective of the business enterprise helps in generating profit which is considered as the main success measure. Managerial economics, or business economics, is a division of microeconomics that focuses on applying economic theory directly to businesses.The application of economic theory through statistical methods helps businesses make decisions and determine strategy on … Copyright ©2012-20 A2zservices PTE LTD. All Rights Reserved. A good decision requires fair knowledge of the aspects of economic theory and tools of economic analysis, which are directly involved in the process of decision making. Many thanks for the great posting. A firm cannot exercise any control over these factors. Managerial economics is the founding principle of business policies. It helps in making successful forecast by defining various objectives that could be help in reducing the risk of the business organization. It aims at the development of economic theory of the firm while facilitating the decision making process with regard to sales and profits etc. This service is unavailable right now. Importance of Managerial Economics Business Planning and Forecasting: Managerial economics plays an efficient role in formulating business policies by forecasting future demands and uncertainties.

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