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What are the objectives and uses of managerial economics? Joel Dean answers this question in the following words: "The purpose of managerial economics is to show how economics analysis can be used in formulating business policies." Success in business depends to a large extent on policies and strategies adopted in business. The basic objective of managerial economics is facilitating formulation of appropriate policies and strategies. This basic objective can be elaborated into the following larger objectives of managerial economics:
1. Integrating economic theory with business practice
2. Using economics tools to analyze business situations
3. Applying economic principles to solve business problems
4. Using economic ideas for crisis management
5. Facilitating demand analysis and demand forecasting
6. Allocating scarce resources for optimizing returns
7. Enabling risk taking and uncertainly bearing
8. Helping in profit maximization
9. Pursuing the larger objectives of the firm other than profit maximization
10. Formulating short-term and long-term business strategies
