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MANAGERIAL ECONOMICS
1
INDEX
UNIT
No.
1
Chapter Name
Page No.
Nature of Managerial Economics
3
2
Supply
15
3
A lV Market Structure
48
4
Nature of Profit
92
4
Nature of Profit
100
5
National Become & Product
115
2
UNIT l
NATURE OF MANAGERIAL ECONOMICS
The prime function of a Management Executive is related to decision - making and forward
planning. Decision making involves the selecting of one action from two or more alternative
courses of action. Forward planning consists of establishing plans for the future. The resources
are limited and can be employed in alternative uses. He has to make choices or decisions that
will provide the most efficient manner; of attaining a desired end, say profit maximization. Once
a decision is made, plans as to production, pricing, purchase of capital, raw materials etc., .are
prepared. Forward planning thus goes hand in hand with decision making.
The significant characteristic of the situation is uncertainty which makes the function
complicated and adds a different dimension to it. There is lack of complete information as to
future sales, costs, profits capital availability.
As the decisions and plans on the basis of past data, are carried on, current information and
estimates about future plans are added over time as some facts become available; and plans
are may be revised and differential course of action may have to be adopted. The Management
Executive is engaged in. a continuous process of decision making through an uncertain future.
The' over all problem confronting him is one of adjusting to uncertainty. Theory provides'
concepts or principles which can be used for decision making in an uncertain frame Work. The
theory shows the manner in which economic analysis can be used towards solving business
problems which constitutes the subject matter of Managerial economics. The definitions of
Managerial Economics are given below.
Menair and Meridian define that Managerial Economics consists of the use of...