Welcome to Presentation

Presentation On

Introduction to Managerial Economics

Group Members ‘A’SL NAME ID

01 Md. Rifat Hasan 140600202 Masud Rana 140601703 Md. Polash Mia 140601804 Md. Mizanur Rahman 140602505 Shamim Hossain 140603206 Most. Jannatul Ferdoush 140605207 Sums Zarin 140605908 Shahin Ali 140606009 Md. Rafiqul Islam 1306034

INTRODUCTION•Emergence of managerial economics as a

separate course of management studies can be attribute to at least three factors :

a. Growing complexity of business decision making process due to changing market conditions and business environment.

b. The increasing use of economic logic , conceptual theories and tools of economic analysis in the process of business decisions making process.

c. Rapid increase in demand for professionally trained managerial power.

Definition of Economics •Economics is the science of making decisions

in the presence of goods or service to achieve a goal. Economic decisions involve the allocation of managerial decision varies depending on the goals of the manager.

•A manager is a person who directs resources to achieve a stated goal and he/she has the responsibility for his/her own actions as well as for the actions of individuals , machines and other inputs under the managers control.

Managerial Economics • Managerial economics is the study of how scarce

resources are directed most efficiently to achieve managerial goals .It is a valuable tool for analyzing business situations to take better decisions.

• Managerial economics can be broadly defined as the study of economic theories ,logic and tools of economic decision making .Economic theories and techniques of economic analysis are applied to analyze business problems , evaluate business options and opportunities with a view to arriving at an appropriate business decisions.

Market Conditions Factor

Prices

Economic Conditions

Managerial Problems

Managerial Decision

Company’s Performance

Market Conditions

Managerial Economics & Theory

•Managerial economics applies macroeconomics theory to business problems.

•How to economic analysis to make decisions to achieve firm’s goal of maximization.

•Economic theory helps managers understand real business problems.

•Uses simplifying assumptions to turn complexity into relative simplicity.

Nature of Managerial Economics

•Close to microeconomics •Operates against the backdrop of

macroeconomics•Normative Statement•Prescriptive Actions •Applied Nature•Offer scope to evaluate each alternative•Interdisciplinary

Scope of Managerial Economics •Demand decisions•Input-output decisions•Price-output decisions•Investment decisions •Analysis of Business environment

Importance of Managerial Economics •Basis of business policies •Predicting economic qualities •Estimating economic relationship•Helpful in understanding the external

forces constituting the environment.•Reconciling theoretical concepts of

economic in relation to the actual business behavior and conditions.

Relationship of Managerial Economics with other Disciplines

•Economic and Econometrics•Mathematics and Statistics•Operational Research(OR)•Accountancy•Psychology and Organizational

Behavior(OB)•Management Theory

Traditional Managerial

It has Micro and Macro aspects Micro aspect

It is both positive and Normative science

Normative in nature

It deals with theoretical aspect Practical aspect

It studies human behavior or certain assumptions

No assumptions

We study Economic aspects of the problem

Both economic and non-economic aspects

Studies principles underlying rent, wages , interest and profits

Only the principles of profit

Limited scope Wide scope

Difference between Managerial Economics or Industrial/Traditional Economics

Managerial Economics as a Tool for Decision Making and Forward Planning•Business decision making is influenced not

only by economic considerations but also by human behavioral and environment ,technological and environmental factors due to growing public awareness .

•“Decision making and processing information are two important tasks of managers”

•In order to make good decisions managers must be able to obtain process and information.

Forward Planning

•Future is uncertain. A firm is operating under the conditions of risk and uncertainly can be minimized only by making accurate forecast and forward planning.

•Managerial economics helps manager in forward planning means making plans for the future.

THANKS TO ALL !!!