Definition and Meaning of Business Economics

Question : Define the term 'Business Economics'. What do you mean by Business Economics?

Answer

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. 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 or Managerial 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."

According to Hauge, "Managerial Economics is concerned with using logic of economics, mathematics & statistics to provide effective ways of thinking about business decision problems."

According to Joel Dean, "The purpose of Managerial Economics is to show how economic analysis can be used in formulating business policies."

Meaning of Business Economics or Managerial Economics

Business Economics or Managerial Economics generally refers to the integration of economics theories with business practises. Economics provides various conceptual tools like - Demand, Supply, Price, Competition, etc. Business economics applies these tools to the management of business. In this sense, business economics also known as applied economics.

Business Economics is the application of principles and theories of economics in practise to run successfully the business. Everyday business manager has to face different problems, while running the business. They would be solved with the help of economic theories. Managers integrates the economic theories with the business practises and takes decisions as well as plans the activities of  business.