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Managerial economics

From Academic Kids

Managerial economics (also called business economics), is a branch of economics that applies microeconomic analysis to specific business decisions. As such, it bridges economic theory and economics in practice. It draws heavily from quantitative techniques such as regression and correlation, Lagrangian calculus, linear programming, decision theory, and game theory. It is similar to operations research in this regard, and indeed uses operations research techniques.

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.

Almost any business decision can be analysed with managerial economics techniques, but it is most commonly applied to:

At universities, the subject is taught primarily to advanced undergrads. It is approached as an integration subject. That is, it integrates many concepts from a wide variety of prerequisite courses.

See also

Finding related topics

External sources

  • Baumol, W. J. (1961) What can economic theory contribute to managerial economics?, American Economic Review, vol. 51, no. 2, May 1961, pp 142-46.
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