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Managerial Economics

Written by  Rachit Agrawal, MBA

Published on Wed, February 12, 2020 5:48 AM   Updated on Mon, February 17, 2020 6:09 AM   3 mins read

Managerial Economics uses economic theories that explain sales, profits, pricing policies and decisions, consumer behavior, exchange rate dynamics, demand-supply relations, capital and investment decisions, and the factors affecting the same. Managerial Economics uses approaches like calculus, regression, correlation, game theory, and optimization in the theories above to ascertain the cost of capital, rate of return, cost estimates, range of output, dividend distribution, etc.

Managerial Economics pragmatically involves both microeconomics and macroeconomics to solve day to day problems of a business. Managerial Economics differs from traditional economics in the sense that it is management-oriented, hence enables a manager to understand the trade-offs better.

There are three types of Managerial Economics, namely, liberal managerialism, normative managerialism, and radical managerialism. Managerial Economics is also multidisciplinary, implying that Managerial Economics connects the decision-making process across departments like Finance, Human Resources, Marketing, Production, etc. in any organization.

The elaborate study of Managerial Economics on a standalone basis or as a part of a wider curriculum helps aspiring managers to be equipped with problem-solving abilities, which is based on quantitative and qualitative rationale. The other subjects studied along with Managerial Economics are Financial Accounting, Statistics, International Business.

Students can opt for courses both at the Under- Graduate Level and Post – Graduate Level, which have Managerial Economics as an integral part of their curriculum. 

At the Under Graduate level, an aspirant can pursue Managerial Economics through courses like Bachelors in Business economics, B.Com (Hons), BBA (Hons), B.A. (Economics). At the Post- Graduate level, an aspirant of Managerial Economics can pursue courses like MBA in Business Economics, MBE in Business Economics, Masters In Applied Economics, M.A. in Business Economics, Diploma in Business Economics. 

The Under Graduate level courses for Managerial Economics generally have a duration of three years, and the eligibility criteria are set based on marks scored in classes 11 and 12 in High School / Senior School. The total fees incurred to study Managerial Economics in India at Under Graduate level ranges from Rs 10,000- Rs1,00,000. The same of Managerial Economics courses cost around INR 15 – 40 lakh abroad ( depending on the university and country). 

The Post Graduate level courses of Managerial Economics generally have a duration of one or two years, a PhD. in Managerial Economics takes much longer though. In India, The admissions are determined through competitive exams like CAT, XAT, etc. Several institutes have their conduct their entrance exams. The final admission to any Managerial Economics course is based on several factors like work experience of an aspirant, the entrance exam score, the performance at the graduate level, and the final interviews. The fees range from 15 lakh – 40 lakh INR, ( depending on the course and institute).

In foreign countries, the admissions for Managerial Economics courses are based on exams like GMAT, GRE, etc. Institutes that offer Managerial Economics as a subject have an elaborate procedure to select candidates, which involve writing essays, online interviews, profile suitability, etc. The fees range from INR 30 lakh to INR 1 crore (depending on the course and institute and country ).

About the Author & Expert


Rachit Agrawal

Author • MBA • 20 Years

Rachit believes in the power of education and has studied from the top institutes of IIIT Allahabad, IIM Calcutta, and Francois Rabelias in France. He has worked as Software Developer with Microsoft and Adobe. Post his MBA, he worked with the world's # 1 consulting firm, The Boston Consulting Group across multiple geographies US, South-East Asia and Europe.

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