DEFINITIONS OF BUSINESS ECONOMICS
Business Economics may be defined as the use of economic analysis to make business decisions involving the best use of an organization’s scarce resources.
Joel Dean defined Business Economics in terms of the use of economic analysis in the formulation of business policies. Business Economics is essentially a component of Applied Economics as it includes application of selected quantitative techniques such as linear programming, regression analysis, capital budgeting, break even analysis and cost analysis.
Our approach in this textis to focus on the heartof Business Economics i.e. the Micro Economic Theory of the behaviour of consumers and firms in competitive markets. This theory provides managers with a basic framework for making key business decisions about the allocation of their firm’s scarce resources.
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