NAME - VEDANT

GRADE - BBA E2 SEMESTER 1

SUBJECT - BUSINESS ECONOMICS
TOPIC - NATURE OF BUSINESS ECONOMICS
 NATURE OF BUSINESS ECONOMICS
• Business Economics involves decision making -
Business Economics facilitates taking certain
decisions that are most favorable for the benefits
of the firm. Such decision making involves
selection of product, allotment of funds, methods
to be used, etc.
• Business Economics is pragmatic in nature –
Business Economics is analytical in nature as it
emphasizes on the practical application more
than the theories of traditional economics.
Hence, it is pragmatic in nature.
• Business Economics is Normative in nature –
Business Economics is goal oriented as it focuses
on the achievement of maximum profit and
hence suggests the numerical value based
solution for the problems faced by the firm. So it
can be stated that business economics is
normative in nature.
• Business Economics is Metrical in nature –
Business Economics is metrical in nature as it
makes use of different mathematical and
statistical data from various microeconomic and
macroeconomic surveys for taking decisions for
the benefits of the firm.
• Business Economics is Conceptual in nature –
Business Economics requires the knowledge of all
the theory and concepts for taking the rightful
decision in the interests of the firm. A rational
decision cannot be taken without knowing the
proper concepts.
• Business Economics is Microeconomic in nature-
This is due to the study of business economics
mainly at the level of firm.
Generally a business manager is concerned with
problems of his own business unit. He does not
study the economic problems of an economy as a
whole.
• Business Economics takes help from
Macroeconomics –
A business unit operates within some economic
environment which is in turn shaped by the
behavior of the economy as a whole. Therefore,
business manager must know the external forces
working over his business environment.
• Business Economics is Multidisciplinary in
nature -
Business Economics takes helps from various
disciplines and in return provides help to various
disciplines of the firm. Business Economics
requires the combination of various disciplines for
an effective decision.
• Business Economics mainly focuses on theory
of the firm –
The theory of firm is the microeconomic concept
which works for the goals of the firm such as
profit maximization which is also the prime
objective of the Business Economics. So, Business
Economics mainly focuses on the theory of firm.
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