A range of theories suggesting that managements in large oligopolistic organizations have supplanted the traditional goal of profit maximization. (New goals may, for example, focus on sales or asset growth maximization.)
Managerial theories of the firm also recognize that power within the organization has shifted away from shareholders to management.
Also see: theory of the firm, agency theory, theory of the growth of the firm, organization theory, bureaucracy
W J Baumol, Business Behavior, Value and Growth (New York, 1959); R Marris, The Economic Theory of ‘Managerial’ Capitalism (London, 1964)
Managerial economics is a branch of economics which deals with the application of the economic concepts, theories, tools, and methodologies to solve practical problems in a business these business decisions not only affect daily decisions, also affects the economic power of long-term planning decisions, its theory is mainly around the demand, production, cost, market and so on several factors. In other words, managerial economics is a combination of economics theory and managerial theory. It helps the manager in decision-making and acts as a link between practice and theory. It is sometimes referred to as business economics and is a branch of economics that applies microeconomic analysis to decision methods of businesses or other management units.
As such, it bridges economic theory and economics in practice. It draws heavily from quantitative techniques such as regression analysis, correlation and calculus. If there is a unifying theme that runs through most of managerial economics, it is the attempt to optimize business decisions given the firm’s objectives and given constraints imposed by scarcity, for example through the use of operations research, mathematical programming, game theory for strategic decisions, and other computational methods
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