Helps minimize costs and maximize output.

Pricing Decisions, Policies, and Practices:

Determining prices under different market conditions (competition, monopoly, oligopoly).
Involves pricing of new products, competitive pricing, transfer pricing, government regulations.

Profit Management:

Capital Management:

Concerned with capital budgeting and investment decisions.
Helps managers choose projects, allocate funds, manage risk for long-term growth.

Macroeconomic Context:

Analyzes impact of external factors (inflation, unemployment, fiscal/monetary/trade policy).
Ensures firm-level decisions are consistent with the overall economic environment.

Basis	Economics	Managerial Economics
1. Scope	Broad - studies individuals, firms, society, governments.	Narrow - focuses mainly on business firms.
2. Nature	Both theoretical & descriptive; explains economic phenomena.	Practical & applied; solves real business problems.
3. Approach	Positive ("what is") + Normative ("what ought to be").	Mainly normative & prescriptive (gives solutions for decision-making).
4. Unit of Study	Both micro (individual units) and macro (national economy).	Mainly microeconomic concepts applied at firm/industry level.
5. Objective	Welfare, efficiency, resource allocation.	Profit maximization, cost control, business growth.
6. Tools Used	General theories, models, assumptions.	Uses economics + quantitative tools (statistics, math, OR, accounting, finance).
7. Decision-making	Not directly decision-oriented, more explanatory.	Directly decision-oriented (pricing, production, investment).
8. Application	Applicable to society as a whole.	Applicable to managers and business enterprises.

Summary: "Managerial Economics applies microeconomic tools in a macroeconomic context — bridging firm-level and policy-level decisions.”

Economics:
- Microeconomics: Provides tools like demand & supply analysis, elasticity, cost and revenue, market structures.
- Macroeconomics: Helps managers understand inflation, interest rates, national income, fiscal/monetary policies, and their impact.
- Link: Applies both micro and macroeconomic principles to business decision-making.
Statistics:
- Used for data collection, presentation, and analysis.
- Helps in demand forecasting, trend analysis, quality control, and hypo