What is the Important of Managerial economic (M.E)

• Estimating Economic Relationship: Managerial economic estimating economic relationship between different business factors such as income of the organisation, elasticity of demand, capital and profit analysis. First of all the organisation ultimate goal to earn profit. If in the organisation activity do properly then to get maximum profit. Every organization should good economic relation to other organisation. In that basis every work is doing early and earn more profit. 

• Predicting relevant economic quantities: Managerial Economic helps to management in predicting the various economic, quantities. Such as cost analysis, profit analysis, capital analysis price of the products. First of all cost analysis that mean cost is the total amount of expenditure, tool and technique of managerial  economic the management produce the product in minimum cost and profit analysis that means if the price of the product will reasonable then buyer by a product to earn profit by the tool and techniques of M.E. We know that the more invest of the capital in business, Price of the product will determined of the basis of satisfaction of buyer and buying capacity of the product.

• Understanding significant external forces and internal forces: The management has to identify all the important factors that influence a firm. These factors can broadly be divided into two categories. Managerial economics plays an essential role by assisting management in understanding these factors. 

• External Factors: These are the factors over which a firm cannot have any control. The plan, policies and programmes of the firms should be adjusted in the light of these factors. Important external factors affecting decision making process of a firm are - Economic system of the country, Taxation Policy, Licensing Policy, Trends in foreign trade of the country, general industrial relation in the country etc. 
• Internal Factors: These are the factors that are within the control of a firm, these factors relate to business operation knowledge of there factors helps the management in making sound business decisions. 

• Basis of Business Policy: Managerial economics is the foundation of business policies. Business policies are prepared on the basis of studies and finding of managerial economics which warns the manage against all the turning point in national as well as international economy.