In management the most important part is the decision making part, because managers need to take decisions at the right time. Management and decision both are inseparable.Management process also includes planning, staffing, organizing, directing and controlling. It is a process where managers after taking into consideration certain factors come to the final decision. Thus it can be said that decision making is an integral part of the management.
In order to take important decisions a manager needs to have a clear idea about the management concept like managerial economics. Managerial economics is very much important for a manager to understand. It mainly deals with the development of economic theory of the firm and help the managers to take decision smoothly with regard to sales and profits. It also enables to take decisions about production as well as inventory policies for the future. In order to increase the efficiency of the production process, this concept is important because it help the managers to analyze risk and production. Through this concept one can understand how much fund is available and how much one can invest in his business. It also enables to understand the demand as well as forecasts on sales. Demand analysis is an important part of managerial economics. Apart from this it also assists the managers to understand competition well as well as the strategies of competitors .Pricing is also an integral part, managers need to understand which price to fix and in future what kind of pricing strategies they can take to increase the profit of the organization. It help to understand the how much revenue a company is earning .Concepts of pricing, pricing forecasting, product like pricing etc are covered in managerial economics. Managerial economics also deals with cost estimates also.
The objective of any business organization is to earn revenue and for this as a manager, he or she should understand all these concepts clearly so that they can apply them in the practical field and get positive results.