Managerial Economics is a discipline that combines economic theory with managerial practice. It tries to bridge the gap between the problems of logic that intrigue economic theorists and the problems of policy that plague practical managers. The subject offers powerful tools and techniques for managerial policy making. An integration of economic theory and tools of decision sciences works successfully in optimal decision making, in face of constraints. A study of managerial economics enriches the analytical skills, helps in the logical structuring of problems, and provides adequate solution to the economic problems. To quote Mansfield, Managerial Economics is concerned with the application of economic concepts and economic analysis to the problems of formulating rational managerial decisions. Spencer and Siegelman have defined the subject as lithe integration of economic theory with business practice for the purpose of facilitating decision making and forward planning by management."
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