Diff between economics vs managerial economics Essay

1 The traditional economical science has some(prenominal) micro and macro constructions whereas managerial economics is essentially micro in character. 2. Economics is both positive and normative science simply the managerial Economics is essentially normative in nature. 3. Economics deals mainly with the theoretical aspect only whereas Managerial Economics deals with the virtual(a) aspect. 4. Managerial Economics studies the activities of an soulfulness firm or unit of measurement. Its analysis of problems is micro in nature, whereas Economics analyzes problems both from micro and macro point of views. 5. Economics studies human behaviour on the basis of plastered assumptions but these assumptions sometimes do not get to good in Managerial Economics as it concerns mainly with practical problems.6. Under Economics we study only the economic aspect of the problems but under Managerial Economics we have to study both the economic and non-economic aspects of the problems. 7. Economics studies principles underlying rent, wages, interest and profits but in Managerial Economics we study mainly the principles of profit only. 8. Sound decision-making in Managerial Economics is considered to be the most important task for the improvement of qualification of the business firm but in Economics it is not so. 9. The cooking stove of Managerial Economics is limited and not so wide as that of EconomicsDiff btw Economic of telescope and scale leafEconomies of ScaleThis is the greet utility that a business obtains due to expansion. That is the factor that cause the average exist of producing a ingathering to fall, as output of the product rises as explained in the Dictionary of Economics. By achieving economies of scale, a company would have the be advantage over its existing and new rivals. Further, the company could achieve busteder berth long run average cost (i.e. productive efficiency). But if engine room changes, this might alter the nature of costs in the long run, where it could concede small businesses to adapt new technology successfully and breakinto the constituted market segments.Have you ever wondered why the price of a digital camera keeps falling, while the functions and performance are naughty? This is Economies of Scale, which brings down the unit cost of production and hence, passes this advantage onto the consumer through lower prices. E.g. for a supermarket get 5,000 cartons of milk as opposed to just 100, is cheaper. That is, the marginal cost of delivering 5,000 cartons impart be low compared to that of getting 100.Economies of ScopeThese are factors that make it cheaper to arise a range of related products than to produce each of the individual products on their own (Dictionary of Economics). When a company produces a wide range of products as opposed to specializing in one or few handful of products economies of scope occurs. For example, a company could expand its product range in mark to take advant age of the value of its existing brands this would exploit economies of scope. In industries, much(prenominal) as telecommunications, healthcare industry etc, the economies of scope has been realized. E.g. when fast food outlets product multiple food items, they enjoy a lower average cost compared to that of firms producing the same food. Because the common factors such as storage, service facilities, etc can be shared among the different food items and hence, reducing the average cost.5 major(ip) Differences between Returns to Scale and Returns to a factorReturns to a factor1. alone one factor varies while all the rest are fixed.2. The factor- counterbalance varies as more and more of the units of the variable factor are employed to profit output.3. Returns to a factor or to variable remainders end up in negative returns.4. It is a short-run phenomenon.5. Returns to variable proportions are caused by indivisibility of certain fixed factors, specialisation of certain variable f actors, or sub-optimal factor proportions. Returns to scale1. All or at least two factors vary.2. Factor proportion called scale does not vary. Factors are increased in same proportion to increase output.3. It is a long-run phenomenon.4. Returns to scale end up in decreasing returns.5. Returns to scale can be attributed to economies and diseconomies of scale caused by skillful and/or managerial indivisibilities, exhaustibility of natural and managerial resources, or depreciability of certain factors. outrage OF MONOPOLYPoor level of service.No consumer sovereignty.Consumers may be charged high prices for low quality of goods and services. Lack of competition may lead to low quality and out dated goods and services. LESS CHOICE OF CONSUMERHIGH harm LEAD TO LOWER CONSUMER SURPLUS