B.Com Notes - Introduction to Business Economics

Introduction to Business Economics

Business Economics plays an important role in our daily economic life and business practises. Economic theories, economic principles, economic laws, economic equations, and economic concepts are used for decision making. On this ground students of commerce should know the importance of basic theories in actual business application. Hence the introduction of Business Economics becomes important to the students.

Business Economics is also known as "Managerial Economics". It is also known as "Applied Economics". Business Management means any activity undertaken to earn profit, run by a person and managed with the help of economics. Therefore Managerial Economics is also called Business Economics. In Managerial Economics the concepts, principles and theories in pure economic science are applied to any business activities. Therefore it is also called as Applied Economics.

Definitions of Business Economics

According to E. F. Brigham and J. L. Pappas, "Managerial Economics is the application of Economic theory and methodology to business administration practise."

According to McNair and Meriam, "Managerial Economics consists of the use of Economic modes of thought to analyse business situations."

According to M. H. Spencer and L. Siegelman, "Managerial Economics is the integration of economic theory with business practise for the purpose of facilitating decision making and forward planning."

Characteristics of Business Economics

• Business economic studies business units, so it is microeconomics in character.
• Business economics is more pragmatic than traditional economics. 
• Business economics is more normative in character than positive or descriptive economics.
• Business economics integrates theory and business practise.
• Business economics mainly uses theory of the firm.