Managerial Economics can be defined as amalgamation of economic theory with business practices so as to ease decision-making and future planning by management. In business concerns, the importance of the managerial economist is therefore recognized a lot today. A managerial economist can play a very important role by assisting the management in using the increasingly specialised skills and sophisticated techniques, required to solve the difficult problems of successful decision-making and forward planning. The role of managerial economics in a globalised environment cannot be overemphasized. Normative economics; Managerial economics belongs to normative economics. Managerial economics plays an important role by assisting management in understanding these factors. The plans, policies and programs of the firm should be formulated in the light of these factors. It studies the problems and principles of an individual business firm or an individual industry. Managerial economics, or business economics, is a division of microeconomics that focuses on applying economic theory directly to businesses.The application of economic theory through statistical methods helps businesses make decisions and determine strategy on … It properly analyses and decides production activities and the cost associated with them. Cost Control: Controlling the cost is another important role played by managerial economics. Role and Importance of Managerial Economics in Decision Making Process - Decision making is an integral part of management. Managerial Economics assists the managers of a firm in a rational solution of obstacles faced in the firm’s activities. Also, it allows the clear and accurate understanding of different existing conditions of … Explain with examples. Managerial economics plays a significant role in the business organizations. Business Planning: Managerial economics assists business organizations in formulating plans and better decision making.It helps in analyzing the demand and forecasting future business activities. It makes use of economic theory and concepts. It provides optimal solutions to managerial decision making issues. Managerial economics helps in effective decision making and a business manager is essentially involved in the processes of decision making as well as forward planning. A managerial economist can play a very important role by assisting the management in using the increasingly specialized skills and sophisticated techniques, required to solve the difficult problems of successful decision-making and forward planning. For example, an administrator of a non-profit hospital strives to provide the best medical care possible given limited medical staff, … It assists the management in forecasting and evaluating the trends of market. “Managerial economics bridges the gap between economic theory and business practice”. It plays effective role in managing the forward planning and decision making in the internal operations of the business. April 14, 2016 | Ripunjay Tiwari | principles of management and managerial economics | economics bridges the gap between economic theory and business, examples., Explain, managerial, practice"., with | 0 Comments Ans. The role of Managerial Economics in managerial decision-making. (a) External factors: A firm cannot exercise any control over these factors. From the above definitions it is obvious that managerial economics stems from the main subject of economics. In doing so, managerial economics is of great importance for a business manager. It therefore important to briefly look at what economics is about so as to appreciate the nature of managerial economics. Managerial economics in character as it is concerned with smaller units of the economy. In the business organization, managerial economics is important. Managerial Economics 5 Role in Managerial Decision Making Managerial economics leverages economic concepts and decision science techniques to solve managerial problems. Managerial Economics has applications in both profit and non-profit sectors.