After the second world war, there was constant changes in the behaviour of the business environment due to the growth of business transactions and economic activities stop the business activities could not be related to the existing economic theories. Hans's new formula of Economics had to be thought of. the resultant managerial economics.
meaning of managerial economics: to define in a precious way, Managerial Economics is economics applied in decision making.
definition of Managerial Economics according to professor Spencer man: managerial economics deals with the integration of economic theory with business practice for the purpose of facilitating decision making and forward planning by management.
significance of economic analysis in business decisions; the main problem before the managerial personnel is to make decisions. simple and complex problems constantly appear before him.
The most important function of the managerial person is decision making advanced planning. the decision making rests the manager. it is the process of selecting one course of action from two or more process of selecting one course of action alternative courses of action. he acts on the basis of priority which is decided by him taking in view the pros and cons of a particular action. After deciding a particular course of action he establishes plans for the future. The problem of decision making is particularly important in view of the fact that the resources are squares and have alternative uses. the most important characteristic condition wherein the management works and take decision are based on uncertainty. if there are any future knowledge plants might have been so constructed so as to give perfection without errors and no changes could be expected. but the future is uncertain. The manager has no knowledge about the future as regards the sales of products, the cost of production and capital investments show all the decisions are made on the basis of fast data
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