What is Management in Economics

Managerial economics is a stream of management studies that emphasizes primarily solving business problems and decision-making by applying the theories and principles of microeconomics and macroeconomics. It is a specialized stream dealing with an organization’s internal issues by using various economic theories. Economics is an indispensable part of any business. All the business assumptions, forecasting, and investments are derived from this single concept. This is managerial economics meaning in a nutshell.

The concepts of Managerial Economics

Liberal Managerialism

A market is a democratic space where people make their choices and decisions in a liberal way. The organization and the managers must function according to the demand of the customers and market trends; otherwise, this can lead to business failures.

Normative managerialism

The managerial economics normative view states that administrative decisions are based on experiences and practices of real life. They have a systematic method for the study of demand, forecasting, cost control, product design and promotion, recruitment, etc.

Radical Managership

Managers have to have a creative approach to business concerns, i.e. they have to make decisions to improve the current situation or circumstance. We concentrate more on the need and satisfaction of the consumer rather than just the maximization of income.

Managerial economic values

The excellent macroeconomist N. Gregory Mankiw has given ten principles to explain the significance of business operations in managerial economics

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