Managerial Economics

Managerial Economics is a specialized field that applies microeconomic principles and quantitative methods to business decision-making and strategic planning. It serves as a practical bridge between abstract economic theory and the real-world problems faced by managers, focusing on how to allocate a firm's scarce resources in the most efficient way to achieve its objectives. Core topics include demand analysis and forecasting, cost and production analysis, pricing strategies, and market structure assessment, all aimed at providing a rational framework for optimizing business outcomes like profit maximization and value creation.

1. Introduction to Managerial Economics
   1. Definition and Scope
      1. Meaning of Managerial Economics
      2. Scope of Managerial Economics
      3. Distinction from Microeconomics and Macroeconomics
      4. Applications in Business Decision-Making
   2. Relationship to Economic Theory
      1. Microeconomic Foundations
      2. Macroeconomic Influences
      3. Integration with Business Economics
   3. Relationship to Decision Sciences
      1. Role of Quantitative Methods
      2. Use of Statistics and Econometrics
      3. Operations Research in Decision-Making
   4. The Role of a Managerial Economist
      1. Functions within an Organization
      2. Skills and Competencies Required
      3. Interaction with Other Departments
   5. The Process of Managerial Decision-Making
      1. Problem Identification
      2. Data Collection and Analysis
      3. Developing Alternatives
      4. Evaluating Alternatives
      5. Decision Implementation
      6. Monitoring and Feedback
   6. The Theory of the Firm
      1. Nature and Purpose of the Firm
      2. Objectives of the Firm
         1. Profit Maximization
            1. Short-Run vs. Long-Run Profit Maximization
            2. Limitations of Profit Maximization
         2. Value Maximization
            1. Shareholder Value
            2. Stakeholder Value
         3. Principal-Agent Problem
            1. Agency Costs
            2. Incentive Alignment
         4. Social Responsibility and Ethical Considerations
            1. Corporate Social Responsibility
            2. Ethical Decision-Making in Business