Scopes and Fundamental concept of managerial economics

Scopes

I. Managerial economics- Is it positive or normative:

II. Area of study:

1. Demand analysis and forecasting:

· Forecasting sales.

· Manipulating demand.

2. Cost and production analysis

3. Pricing decisions, policies and practices

4. Profit management

5. Capital management

6. Linear programming and theory of games.

III. Profit: The central concept in managerial economics:

IV. Optimization:

V. Relationship of managerial economics with other disciplines:

1. Managerial economics and micro economics.

2. Managerial economics and macroeconomics.

3. Managerial economics and mathematics.

4. Managerial economics and statistics:

5. Marshaling of quantitative data

6. Empirical Testing

7. Theory of probability

8. Managerial economics and accounting.

9. Managerial economics and operations research.

Fundamental concept of managerial economics

1. Opportunity cost principle

2. Incremental cost and revenue principle

3. Time perspective and Equi-marginal principle