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Business Economics , its nature and uses

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Definition of Business economics


Business economics is that part of economics which are related to economic activities and sole aim to growth in business . Every business is operated by some resources and these are limited . Business economics tells the techniques about how to utilize resources for maximum satisfaction . Both micro and macro economics tools are used in business economics . But micro economics are so related to business economics because for effective operating of business , micro economics helps to optimize demand , production and price and factor price theories .

Uses of business economics

There are many uses of business economics which can be explain in following points .

1. Effective utilization of business resources :

Business economics study is very helpful for effective utilization of business resources . It determines every factor's price on supply and demand of such factor so , that the price becomes optimize by this supply and demand analysis .

2. Full employment

Keynesian 's general theory of employment tells us that full employment depends on investment and effective demand if both will increase after this employment can increase . Govt. takes steps for increasing investment in self employment schemes and try to help to sell the products after this full employment generated .

3. Profit and wealth maximization

Main motive of business can be fulfil with use the techniques of economy . Economics build up wealth equilibrium of production and demand . Business knows what to produce , how much to produce and to whom to sell and after knowing these techniques , his cost is reduced and its positive effect is on profit and wealth .

4. Effective use of economic policies for business development

Business economics makes different economic policies under macro economics and these policies utilize for business and trade development . For instance , we can take monetary policies . In monetary policies , RBI has power to change CRR and other interest rate for development of business .

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Svtuition: Business Economics , its nature and uses
Business Economics , its nature and uses
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