Everybody in this world have unlimited needs and wants but we only have limited number of resources to acquire what we want. Maintaining an efficient balance between wants and limited resources is what business economics deals with. Therefore understanding the meaning of Business Economics is extremely crucial.
But when we are talking about it, we consider the need of bigger entity. For example a Nation, a firm etc.
To understand the meaning of Business Economics we can take it as an integration of two major concepts:
- Economic Theory
- Business Practices
It helps in taking best decision by considering the analytical tools of Economic Theory and best suited business policies defined within Business practices.
It tells us about all the factors which are affecting the production efficiency of the resources either increasing it or decreasing it.
Definitions by authors
According to McNair and Meriam, “Business economic consists of the use of economic modes of thought to analyses business situations.”
Siegel man has defined managerial economic (or business economic) as “the integration of economic theory with business practice for the purpose of facilitating decision-making and forward planning by management.”
According to E. F. Brigham and J.L. Pappas,”It is the application of Economic theory and methodology to business administration practice.”
According to M.H. Spencer and L. Siegelman, “Business Economics is the integration of economic theory with business practice for the purpose of facilitating decision making and forward planning.”
According to Hauge,
“It is concerned with using logic of economics, mathematics & statistics to provide effective ways of thinking about business decision problems.”
According to Joel Dean, “The purpose of Business Economics is to show how economic analysis can be used in formulating business policies.”
It also helps in examining economic issues for selecting the best course of action from all the available options. All the actions will influence the performance of the business that’s why it is important to take right decision.
It is also called as managerial economics. Its branch has established link between business and economics.
Thus it is an applied economics and economics is the study of human beings (e.g. consumers, firms etc.) in producing and consuming the goods and services with the proper utilization of scarce resources.
It is an applied branch of organizing and allocating the firms scarce resources to achieve its desired objective of the firm.
It is the study of economic theories, logic and tools of economic analysis that are used in the process of business decision making.
It is that discipline which uses economic concepts, principles and economic analysis in taking business decision and formulating future plans.
It integrates economic theories with business theories with business policies.
It lies on the boundary line between economics and business management and bridges the gap between the two.