Importance Of Business Economics

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Assignment 1: - m“Business economics which is the gap between abstract theory and business practice. It uses tools of economic analysis in classifying problems, in organizing and evaluating information and In comparing alternative courses of action.” Outline the nature and scope of business economics in the light of this statement. Assignment 2: - oState the importance of price elasticity of demand to production managers, marketing managers, personnel managers and policy makers. Why business firms charge higher price for goods with low demand elasticity. Assignment 3: - Copyright © www.www.examrace.com Discuss the desirability if price discrimination. Suppose the average cost curve of producing a product lies everywhere above…show more content…
In actual practice different types of business are existing and run by people so study of Business Economics become very useful for businessmen. Since the emergence of economic reforms in Indian economy the whole economic scenario regarding the business is changed.Various new types of businesses are emerged, while taking the business decisions business men are using economic tools. Economic theories, economic principles, economic laws, equations 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…show more content…
The major part of business decision making depends on accurate estimation of demand. It explains how the consumer decides whether or not to buy a commodity, how they decide on the commodity to be purchased, how the consumer behave when the price of the commodity, their income and tastes and fashion, etc. change at what level of demand, changing price become inconsequential in terms of total revenue. The knowledge of demand theory can, therefore, be helpful in the choice of the commodity to be produced. Forecasting is another important scope of business economics. It makes research and conducts market survey with a view to know the tastes and fashions of the consumer. Business economics analyze the demand behavior and forecasts the quantity demanded by the costumers. COST AND PRODUCTION ANALYSIS A study of economic costs, combined with the data from the firm’s accounting records, can yield significant cost estimates which are useful for management decisions. An element of cost uncertainty exists because all the factors determining costs are not known and controllable. Discovering economic costs and the ability to measure them are necessary steps for more effective profit planning, cost control and sound pricing practice. Production analysis is narrower in scope than cost analysis. Production analysis frequently proceeds in physical terms while cost analysis proceeds in monetary
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