INTRODUCTION:-
Business economics is, economics applied in decision-making.It interweaves economic principles and business. Business managers apply economic laws and principles while presenting business problems and their ways of solutions. Thus, business economics can be defined as the application of economic analysis to business problems faced by an enterprise. It provides a link between economic theory and the decision sciences in the analysis of managerial decision-making. It relies heavily on traditional economics and decision sciences.
NATURE:-
Traditional economic theory has developed along two lines; viz., normative and positive.
Normative focuses on prescriptive statements, and help establish rules aimed at attaining the specified goals of business.
Positive, on the other hand, focuses on description.It aims at describing the manner in which the economic system operates without staffing how they should operate.
The emphasis in business economics is on normative theory. Business economic seeks to establish rules which help business firms attain their goals, which indeed is also the essence of the word normative. However, if the firms are to establish valid decision rules, they must thoroughly understand their environment. This requires the study of positive or descriptive theory. Thus, Business economics combines the essentials of the normative and positive economic theory, the emphasis being more on the former than the latter.
Business economics is, economics applied in decision-making.It interweaves economic principles and business. Business managers apply economic laws and principles while presenting business problems and their ways of solutions. Thus, business economics can be defined as the application of economic analysis to business problems faced by an enterprise. It provides a link between economic theory and the decision sciences in the analysis of managerial decision-making. It relies heavily on traditional economics and decision sciences.
NATURE:-
Traditional economic theory has developed along two lines; viz., normative and positive.
Normative focuses on prescriptive statements, and help establish rules aimed at attaining the specified goals of business.
Positive, on the other hand, focuses on description.It aims at describing the manner in which the economic system operates without staffing how they should operate.
The emphasis in business economics is on normative theory. Business economic seeks to establish rules which help business firms attain their goals, which indeed is also the essence of the word normative. However, if the firms are to establish valid decision rules, they must thoroughly understand their environment. This requires the study of positive or descriptive theory. Thus, Business economics combines the essentials of the normative and positive economic theory, the emphasis being more on the former than the latter.
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