Micro Economics and Marco Economics. Managerial economics is rooted in Micro Economic theory. Managerial economics helps in effective decision making and a business manager is essentially involved in the processes of decision making as well as forward planning. Thomas J. Webster defines managerial economics as the application of economic theory and quantitative methods ( mathematics and statistics) to the managerial decision-making process. The fact that a business entity is influenced by the conditions is uncertainty about the future and due to the changes in the business environment resulting complexities in business decisions. In doing so, managerial economics is of great importance for a business manager. 1 Definition of managerial economics Managerial economics has several definition as defined by different economists and authors. Microeconomics is the study of the economic behavior of individuals, firms and other such micro organizations. The relationship between managerial economics and economics theory may be viewed form the point of view of the two approaches to the subject Viz. Successful leaders focus on the economics of a business for decision making. Managerial economics is a #management science that gives you more idea about the economic aspects of a market and how they affect your decision making. Economic Aspects of a Market. This is very important because economic profits play a crucial role in a market based economy., While above normal profits are indicators of … 1.
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