Definition Of Business Economics Commerce Essay

Definition Of subscriber line economical science Commerce Essay channel political economy, also called Managerial political economy as a field in applied economic science r kayoedines economic practicalness and quantitative methods to analyze condescension enterprises and the cyphers contributing to the diversity of organizational structures and the analogyships of organizations with labour, capital of the United States ,land ,taxes international trade and harvest-tide markets. Managerial Economics consists of that part of economic opening which servings the disdain managing director to study purposes. occupancy involves decision- do. conclusiveness make means the process of selecting cardinal out of two or to a greater extent alternative courses of action. Economic theories succor to analyze the pragmatical problems faced by assembly line organizations. Business economic science integrates economic conjecture with furrow practice. It is a special bra nch of economics that bridges the gap mingled with economic opening and logical argument worry. It deals with the use of economic concepts and principles for decision making in a avocation unit. It is called Business Economics or Economics of the organizations. Every line of products is operated by few resources and these ar limited . Business economics tells the techniques astir(predicate) how to utilize resources for upper limit satisfaction . Both micro and macro economics tools argon use in occupancy economics . But micro economics are so related to business economics because for legal operating of business , micro economics admirers to optimize take on , production and price and factor price theories.DEFINITION OF BUSINESS political economyIn simple words, business economics is the discipline which helps a business managing director in decision making for achieving the desired results. In other words, it deals with the natural covering of economic surmisal t o business caution. jibe to Spencer and Siegelman, Business economics is the integration ofeconomic theory with business practice for the purpose of facilitating decision-making and forward planning by management.According to Mc Nair and Meriam, Business economics deals with the use ofeconomic modes of thought to analyses business situation.From the above said definitions, we conclude the chase objectives of business economics1) account statement of nature and form of economic analysis2) To apply economic concepts and principles to make water out business problems3) Spell out the kinship between Managerial Economics and other disciplinesoutline the methodology of managerial economics.4) To make overall victimization of a house.5) To minimize risk and uncertainty6) To help in need and sales forecasting.7) To help in operation of firm by destiny in planning, organizing, controlling and so on8) To help in formulating business policies.9) To help in profit maximization.NATURE OF BUSINESS economicsManagerial Economics and Business economics are the two terms, which, at times commence been utilize interchangeably. However, the term Managerial Economics has become more normal and seems to displace progressively the term Business Economics. Business economic seeks to shit rules which help business organizations attain their goals, which indeed is also the essence of the word normative. However, if the firms are to establish valid decision rules, they must thoroughly clear their environment. This requires the study of positive or descriptive theory.SCOPE OF BUSINESS economic science As regards the scope of business economics, no uniformity of viewsexists among various authors. However, the following aspects are said togenerally fall under business economics.1. learn Analysis and Forecasting2. Cost and production Analysis.3. Pricing Decisions, policies and practices.4. Profit wariness.5. Capital Management.6. Inventory management7. Linear programming and theory of games8. Environmental issues9. Business cyclesThese various aspects are also considered to be comprising the repress matter of business economic. Thus, managerial economics comprises both micro and macro-economic theories.The subject matter of managerial economics consists of all those economic concepts, theories and tools of analysis which can be used to analyze the business environment and to find out solution to practical business problems.CHARACTERISTICS OF BUSINESS ECONOMICSThe following characteristics of business economics are1. Micro economics Managerial economics is micro economic in character. This is so because it deals with the problems of an individual business unit. It does not study the problems of the entire economy.2. normative science Managerial economics is a normative science. It is concerned with what management should do under particular circumstances. It determines the goals of the enterprise. Then it develops the ways to achieve these goals.3 . pragmatical Managerial economics is pragmatic. It concentrates on making economic theory more application oriented. It tries to solve the managerial problems in their day-today functioning.4. Prescriptive Managerial economics is prescriptive rather than descriptive. Itdescribes solutions to various business problems.5. Uses macro economics Marco economics is also useful to business economics. Macro-economics provides an intelligent understanding of the environment in which the business operates. Managerial economics takes the help of macro-economics to understand the external conditions much(prenominal) as business cycle, national income, economic policies of Government etc.6. Uses theory of firm Managerial economics largely uses the body of economic concepts and principles towards resolving power the business problems. Managerial economics is a special branch of economics to bridge the gap between economic theory and managerial practice.7. Management oriented The main aim of managerial economics is to help themanagement in taking correct decisions and preparing plans and policies for future. Managerial economics analyses the problems and give solutions undecomposed as doctor tries to give relief to the patient.8. Multi disciplinary Managerial economics makes use of most modern tools ofmathematics, statistics and operation research. In decision making and planningprinciples such accounting, finance, marketing, production and personnel etc.9. Art and science.-Managerial economics is both a science and an art. As a science, it establishes relationship between cause and effect by collecting, classifying and analyzing the facts on the basis of certain principles. It points out to the objectives and also shows the way to attain the said objectives.SIGNIFICANCE OF BUSINESS ECONOMICS1. Business economic is concerned with those aspects of traditional economics which are cooperative for business decision making in real life. These are fit or modified with a vi ew to enable the manager take fracture decisions.2. It also incorporates useful ideas from other disciplines such as Psychology, Sociology, Accounting. Statistics and math can be used to solve or at to the lowest degree throw some visible radiation upon the problems of business management. Business economics takes the help of other disciplines having a bearing on the business decisions in relation various explicit and implicit constraints subject to which resource allocation is to be optimized.3. Business economics helps in reaching a variety of business decisions in acomplicated environment.4. Business economics makes a manager a more competent model builder.It helps him appreciate the essential relationship Characterizing a givensituation.5. At the level of the firm. Where its operations are conducted thoughknown focus functional areas, such as finance, marketing, personnel and production, business economics serves as an integrating agent by coordinating the activities in thes e unlike areas.6. Business economics takes cognizance of the interaction between the firmand society, and accomplishes the key role of an agent in achieving the its favorable and economic wellbeing goals. It has come to be realized that a business, apart from its obligations to shareholders, has certain social obligations. Business economics focuses attention on these social obligations as constraints subject to which business decisions are taken.It serves as an instrument in furthering the economic well-being of thesociety through socially oriented business decisions.USES OF BUSINESS ECONOMICSBusiness economics is useful because1) It provides tools and techniques for managerial decisions2) It gives answers to the basic problems of business management.3) It supplies entropy for analysis and forecasting.4) It provides tools for take in forecasting and profit planning.5) It guides the managerial economist.6) It provides optimal ancestor to Business Problems.7) Business economics study is very helpful for effective utilization of business resources. It determines every factors price on supply and demand of such factor so, that the price becomes optimize by this supply and demand analysis.8) Keynesian s general theory of employment tells us that full employment depends on investment and effective demand if both willing increase after this employment can increase . Govt. takes steps for increase investment in self employment schemes and try to help to shop the products after this full employment generated.Thus, Business economics offers a teleph one and only(a) number of benefits to business managers. It is also useful to individuals, society and political relation.APPLICATIONS OF BUSINESS ECONOMICS IN MANAGEMENTThe basic function of a management executive in a business organization is decision making and forward planning. Decision Making means the process of selecting one action from two or more alternative courses of action whereas forward planning mea ns making plans for the future. The question of choice arises because resources such as capital, land, labor and management are limited and can be employed in alternative uses.The application of economics to business management or the integration of economic theory with business practice, as Spencer and Siegelman presents, the following aspects -Reconciling traditional theoretical concepts of economics in relation to the actual business behavior and conditions. In economic theory, the technique of analysis is one of model building whereby certain assumptions are made and on that basis, conclusions as to the behavior of the firms are drowned. The assumptions, however, make the theory of the firm unrealistic since it fails to provide a satisfactory explanation of that what the firms rattling do. Hence the need to reconcile the theoretical principles based on simplify assumptions with actual business practice and develops appropriate extensions and reformulation of economic theory, if necessary.Estimating economic relationships, viz., measuring stick of various types of elasticities of demand such as price elasticity, income elasticity, cross-elasticity, promotional elasticity, cost-output relationships, etc. The estimates of these economic relationships are to be used for purposes of forecasting.Predicting relevant economic quantities, eg., profit, demand, production, costs, pricing, capital, etc., in numerical terms together with their probabilities. As the business manager has to work in an environment of uncertainty, future is to be predicted so that in the light of the predicted estimates, decision making and forward planning may be possible. utilize economic quantities in decision making and forward planning, that is, formulating business policies and, on that basis, establishing business plans for the future pertaining to profit, prices, costs, capital, etc. The nature of economic forecasting is such that it indicates the degree of probability of various possible outcomes, i.e. losses or gains as a result of following each one of the strategies available. Hence, before a business manager there exists a quantified picture indicating the number of courses open, their possible outcomes and the quantified probability of each outcome. Keeping this picture in view, he decides about the strategy to be chosen.Understanding significant external forces constituting the environment in which the business is operating and to which it must adjust, e.g., business cycles, fluctuations in national income and government policies pertaining to public finance, fiscal policy and taxation, international economics and foreign trade, fiscal economics, labor relations, anti-monopoly measures, industrial licensing, price controls, etc. The business manager has to judge the relevance and impact of these external forces in relation to the particular business unit and its business policies.CONCLUSIONIn business organizations and firms business economics play s a very important role .The usefulness of business economics lies in adopting the tools from economic theory, incorporating relevant ideas from other fields to take better business decisions. business economics serve as a catalytic agent in theprocess of decision making by different functional departments at the firmslevel. For the organizations appropriate direction one should follow the rules of business economics. which will be helpful in organizations success.