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Managerial Economics Principles (LibreTexts)

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    44755

    • Anonymous
    • LibreTexts
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    Managerial Economics refers to the application of economic theory and the tools of decision science to examine how an organization can achieve its aims or objectives most efficiently. Managerial decision-making problems arise in an organization when they seek to achieve some objective subject to constraints. For example, a telecommunication company may try to provide its service to as many customers as possible at the lowest possible cost. A hotel may seek to rent its room to the maximum tourists with limitations on its physical resources and budget. A university may aim to provide education to as many students as possible subject to the physical and financial constraints it faces. Managerial Economics is a link between two disciplines, which are management and economics. The management discipline focuses on a number of principles that aid the decision-making process of organizations. On the other hand, economics is related to the optimum allocation of limited resources for attaining the set objectives of organizations.

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