Definition of Managerial Economics


Managerial economics is simply Applied Microeconomics.


Managerial economics applies economic theory and methods to business and administrative decision making. As a result of its application of the tools and techniques of economic analysis to solve managerial problems, managerial economics links traditional/conventional economics with the decision sciences (eg statistical estimation, forecasting, and optimization) as important tools for managerial decision making.



Managerial economics deals with the application of microeconomic reasoning to real world decision – solving problems faced by private, public and not for profit institutions. Managerial economics extracts from microeconomic theory those concepts and techniques that enable a decision maker to select strategic direction, to allocate efficiently the resources of the organization and to respond effectively to tactical issues.


All managers seek to identify the alternative means of achieving given objectives and then to select the alternative that accomplishes the objectives in the most resource efficient manner, taking into account the constraints and the likely actions and reactions of interdependent rival decision makers.

Like it? Share with your friends!

BMS Team

We, at, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to [email protected]


Facebook comments:

Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Voting to make decisions or determine opinions
Formatted Text with Embeds and Visuals
The Classic Internet Listicles
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Upload your own images to make custom memes
Youtube, Vimeo or Vine Embeds
Soundcloud or Mixcloud Embeds
Photo or GIF
GIF format