Bcom 1st Year Meaning of business economics
Meaning and Definition of Business Economics
Business economics is a well-developed form of traditional economics with the help of a manager solving economic problems related to his firm and deciding how to best utilize the available resources. At the present time, business economics has made an important place in the business sector, because under it various practical problems related to the firm; For example, in-depth analysis of capital budgeting, price policies, cost analysis, demand forecasting, profit planning etc., the firm’s personal. The best solution is sought according to the circumstances, while in conventional economics, economic theories are formulated by studying the entire economy without paying special attention to such problems. But this does not reduce the importance of traditional economics, Because in the absence of knowledge of the general economic principles propounded by it, a professional economist would be like a physician who risks patients’ lives by treating patients with incomplete knowledge of medicine. The reality is that business economics originated from the womb of traditional economics and many of the general economic principles discovered by it are used on a personal level to solve the problems of a business firm. By treating patients with incomplete knowledge of medicine, they risk their lives. The reality is that business economics originated from the womb of traditional economics and many general economic principles discovered by it are used on a personal level to solve the problems of a business firm. By treating patients with incomplete knowledge of medicine, they risk their lives. The reality is that business economics originated from the womb of traditional economics and many of the general economic principles discovered by it are used on a personal level to solve the problems of a business firm.
Various scholars have given definitions in relation to business economics, the main definitions of which are as follows –
In the words of Haynes, Mott and Paul—
“Business economics is the economics used in decision making. It is that particular branch of economics that works to bridge the gap between absolute theory and managerial behavior. ”
In the words of Spencer and Siegelman-
“Business economics is integration with business practice, facilitating management in decision making and future planning.
In the words of McNair and Merriam—
“Business economics involves the application of economic principles to the analysis of business conditions.”
In the words of Norman F. Fr.
“Business economics consists of that part of economics, which is called the principle of the firm and which can be sufficiently helpful to the businessman in making decisions.”
By studying and analyzing the above definitions, it is clear that business economics is that part of economics which is concerned with analyzing the problems of the institution or the Fama and presenting practical solutions, thereby exploiting the available human and material resources in the best way. In other words, it can be said that business economics is a scripture that deals with the use of economic principles in business management, or the integration of economic principles with business practice to facilitate management decision-making and future planning. It is business economics.
Nature of Business Economics
The nature of business economics makes the knowledge that it comes under the category of science or science or both science and art. Not only this, it also shows that if it is a science, then it would be appropriate to put it in the category of ideal science or it is real science or both types of science.
Business Economics : In the form of Science
In order to see business economics as a science, it is very important to understand the meaning of science, so that those characteristics which are found in a science can be found within business economics.
Science is a systematic branch of knowledge. It has certain principles which meet every place and situation. Science can be divided into two categories – first, real science and second, ideal science. Under Real Science, a relationship is established between the cause and the result. In other words, what is real science? ‘ Is able to answer with ease and it has nothing to do with what should be done to solve a problem. On the contrary, what is ‘normative science’ now poses the question whether business economics is a science? It is clear in this context that what is the status of the firm’s various economic activities in the present and what should be done to achieve the desired results in the future, Both these questions get clear answers. In other words, the whole economic activities of the firm under business economics are studied and analyzed from both theoretical and practical perspectives; Like how much quantity the firm is producing in the present time and what should be the level of production capacity in future, so that the growing demand can be met. Similarly, what is the present profitability of the firm and what should be done to increase it, etc. In this way, commercial economics is both real and ideal science, but it would be more appropriate to put it in the category of ideal science because the question ‘What is it?’ Than ‘what should happen?’ Matters more. Under business economics, the entire economic activity of the firm is studied and analyzed from both theoretical and practical perspectives; Like how much quantity the firm is producing in the present time and what should be the level of production capacity in future, so that the growing demand can be met. Similarly, what is the present profitability of the firm and what should be done to increase it, etc. In this way, commercial economics is both real and ideal science, but it would be more appropriate to put it in the category of ideal science because the question ‘What is it?’ Than ‘what should happen?’ Matters more. Under business economics, the entire economic activity of the firm is studied and analyzed from both theoretical and practical perspectives; Like how much quantity the firm is producing in the present time and what should be the level of production capacity in future, so that the growing demand can be met. Similarly, what is the present profitability of the firm and what should be done to increase it, etc. In this way, commercial economics is both real and ideal science, but it would be more appropriate to put it in the category of ideal science because the question ‘What is it?’ Than ‘what should happen?’ Matters more. What is the current profit making capacity of the firm and what should be done to enhance it etc. In this way, commercial economics is both real and ideal science, but it would be more appropriate to put it in the category of ideal science because the question ‘What is it?’ Than ‘what should happen?’ Matters more. What is the current profit making capacity of the firm and what should be done to enhance it etc. In this way, commercial economics is both real and ideal science, but it would be more appropriate to put it in the category of ideal science because the question ‘What is it?’ Than ‘what should happen?’ Matters more.
Business Economics : In the form of an Art
Before knowing whether business economics is art, it is necessary to have a clear meaning of art, so that it can be decided to what extent business economics meets the criteria of art and how far it is appropriate to put it in the category of art. Art is a well-organized and well-planned method of doing work, through which it is possible to achieve the objectives of the festival effectively. In other words. The method of best utilizing the human and material resources available with the firm to achieve pre-determined goals is called art. Under consideration of Prof. Luigi. “Art guides us, Explains working and proposes rules. Question ‘how?’ Only art can answer that because it tells how an action can be done effectively. ” Looking at business economics from the perspective of art, it is clear that it is a high-class art because under it the firm’s methods of solving many economic problems are constantly searched and the method of best use of available tools is described. , So that the objectives of the institution can be achieved effectively.
On seeing business economics as science and art, it is clear that it is a novel science or art.
Field of business economics
(Scope of Business Economics)
Although substantial differences are found in the views of different scholars regarding the field of business economics, most scholars are in favor of including the following aspects under its field.
1. The principle of fum
(Theory of Firm)-
Under the theory of the firm, the firm’s model is made, its objectives are determined and the theory and functioning of the firm are studied in depth. ..
2. Demand Analysis and Forecasting
Demand analysis and forecasting are also included in the field of business economics. Under this, the law of demand, demand table, demand curve, elasticity of demand, differences in demand, determinants of demand and various methods of demand forecasting are studied and analyzed.
3. Cost and production analysis
Cost analysis has its own special importance for establishing effective cost control of production, planning of benefits and efficient management practices. Through this, knowledge of the elements that cause the estimated cost of production also changes. Under production analysis, detailed consideration of cost concepts, cost curves, cost classification, marginal cost analysis, cost-production relationship, scale of origin, linear program etc. is done.
4. Competitiveness Analysis
Analyzing various competitive conditions prevailing in the market is also the subject matter of the field of business economics. This study shows the policies to be followed by competing firms and accordingly helps the managers to formulate their own firm’s policies.
5. Value systems and policies
Value systems and policies are an important area of business economics. Under this, pricing in different competitive circumstances, different alternative methods of pricing, price differentiation policies, pricing of product category etc. are included.
The difference between business economics and traditional economics
1- Nature
Business economics is an ideal science and tomorrow. Under this, not only the theoretical but practical aspect of the problem. In contrast to the focus and analysis of the best way to perform a task, the traditional economics is descriptive in nature was this is the interpretation of economic theory.
2. Scope
The field of business economics lives up to the actions of the firm, that is, by thorough analysis of various problems of a particular firm, alternative methods of solving them are discovered. Traditional economics is embracing the entire economic system. In this way, the field of business economics is very limited compared to the field of traditional economics.
3. Criteria of Assumption –
Most of the assumptions of the principles of commercial economy cease by themselves, because it is not possible to solve practical problems on the basis of assumptions. When most theories of traditional economics are based on assumptions.
4. Economic and Uneconomic Aspects
In business economics, attention is given not only to the economic aspects of the problem, but also to various economic aspects, while traditional economics confines its scope to purely economic activities.
5. Priority of Principles –
Profit theory is given priority in business economics, and other principles for achieving this objective; Just like cost theory, demand and supply theory, pricing principle etc. are used, whereas under traditional economics, principles of profit, rent, wages, population, cost, pricing etc. are discussed with equal importance. is.
6. Decision Making –
In business economics, not only the current state of the problem is studied, but important decisions are also taken in relation to its solution, whereas traditional economics is only ‘what is?’ It confines its activities to the answer of the question itself. What should be its relation? And ‘how should it be?’ Is not from
7. Need of Business Efficiency
Business economics is directly related to the business firm. Therefore, there is a great need for business acumen, so that important decisions can be taken to solve various problems, whereas in traditional economics, efficiency is thus not directly related. It is clear from the discussion of the above differences that the field of business economics is narrow, but it focuses on the practical problems of the firm. On the other hand, although there is no practical application of traditional economics directly, the whole framework of business economics The principles propounded by traditional economics lie in its foundation .
