Economic Theory And Managerial Economics

Economic Theory And Managerial Economics

Economic theory offers a variety of concepts and analytical tools that can assist the manager in the decision-making practices. Problem solving in business has, however, found that there exists a wide disparity between the economic theory of a firm and actual observed practice, thus necessitating the use of many skills and be quite useful to examine two aspects in this regard:

• The basic tools of managerial economics which it has borrowed from economics, and

• The nature and extent of gap between the economic theory of the firm and the managerial theory of the firm.