1. Managerial Economics An Introduction By: Malik Abrar Altaf
Lecturer Management
SM Iqbal Business School

2. In managerial economics, the emphasis is upon the firm, the environment in which the firm finds itself, and the decisions which individual firms have to take.

3. The Definition and Scope of Managerial Economics
Objectives:
1. The subject matter of Managerial Economics
2. The analytical approach used in Managerial Economics

4. DEFINITIONS
Douglas - “Managerial economics is .. the application of economic principles and methodologies to the decision-making process within the firm or organization.”
Pappas & Hirschey - “Managerial economics applies economic theory and methods to business and administrative decision-making.”
Salvatore - “Managerial economics refers to the application of economic theory and the tools of analysis of decision science to examine how an organisation can achieve its objectives most effectively.”

5. Howard Davies and Pun-Lee Lam -
“It is the application of economic analysis to business problems; it has its origin in theoretical microeconomics.”

6. These Definitions Cover a Number of Different Approaches
1. Analysis based on the theory of the firm.
2. Analysis based upon management sciences.
3. Analysis based upon industrial economics .

7. International Economics
Structure
Economics
Macroeconomics
Microeconomics
“Sector” economics
Money, finance, banking
Labor economics
Economics of IT and EC
Managerial economics
International Economics
Regional Economics
Economic Development

8. Managerial decision problems Product price and output Make or buy
Production technique
Internet strategy
Advertising media and intensity
Investment and financing
Economic concepts
Theory of consumer behaviour
Theory of firm
Theory of market structures and pricing
Decision making tools
Numerical analysis
Statistical analysis
Forecasting
Game theory
Optimisation
Managerial Economics
Use of economics concepts and decision making tools to solve managerial decision problems
Optimal solutions

9. Why managerial Economics
A powerful “analytical engine”.
A broader perspective on the firm.
what is a firm?
what are the firm’s overall objectives?
what pressures drive the firm towards profit and away from profit.
The basis for some of the more rigorous analysis of issues in Marketing and Strategic Management.