Managerial Economics: Managerial Economic Will Benefit You

Managerial Economics
Name
Institution
Date
How the study of managerial economic will benefit you as a businessperson and a household decision maker.
Managerial economics is the study of management and economics that includes the microeconomics and macroeconomics. Microeconomics is the study of consumer behavior and firms, while macroeconomics is the study of the economy as a whole (McGuigan, Moyer & Harris, 2013). Studying managerial economics helps managers make rational solutions to overcome business challenges. The study of Managerial Economics is important because it highlights important market features that need to be considered with scarce resources, these include materials used in products for goods and delivering services to achieve a business goal(McGuigan, Moyer & Harris, 2013).
Important decisions are made because of the scarcity of resources, one need to make a choice by giving up on other options to achieve the desired objectives. Economic decision is a process of properly allocating resources to meet the desired goal. Managerial economics is important because it provides insights to managers on how to direct the scarce resources in an efficient were to achieve a managerial goal (Graham, Harvey & Puri, 2015). Managerial economics is a broad discipline that describes strategies used to direct resources not only for managers but also household makers to maximize the available resources, studying Managerial economics is key because it helps us make sound decisions (Graham, Harvey & Puri, 2015).
According to McGuigan, Moyer & Harris, (2013), the process of assimilating the economic theories with business practices to make decisions by the management is termed as managerial economics. The study of managerial economics serves various purposes and is useful for both managers and household makers. In business, managerial economics aims at helping managers utilize economic theories to facilitate decision-making process based on sales and profit. It helps in making important decisions like production and inventory policies for the future (McGuigan, Moyer & Harris, 2013).
The knowledge of managerial economics helps in making forecasts with the aim of minimizing the risks involved in the business. It deals with knowing how much need to be available and how many needs to be invested. Any business should produce goods to be sold based on the market demand (Graham, Harvey & Puri, 2015). In this regard, decision-related to demand are of significance for the managers. Making estimates with a proper forecast of sales before production needs a better understanding of the market. Demand analysis is an essential part of understanding managerial economics because it analyzes some of the determinants to make a proper forecast thr...