What is 'Business Economics'

Business economics is the study of the financial issues and challenges faced by corporations operating in a specified marketplace or economy. Business economics deals with issues such as business organization, management, expansion and strategy. Studies might include how and why corporations expand, the impact of entrepreneurs, the interactions between corporations, and the role of governments in regulation.

BREAKING DOWN 'Business Economics'

Economics refers to the study of the components and functions of a particular marketplace or economy, such as supply and demand and the effect of the concept of scarcity. Within an economy, issues regarding production may be examined, as well as distribution methods. Further, consumption by the associated economy’s population can be analyzed.

Factors Within Business Operations

Business economics focuses on the factors within business operations and how they relate to the economy as a whole. It integrates economic principles and strategies into standard business practices. This can include the acquisition of necessary capital, the generation of profit, the efficiency of production and overall management strategy. It includes issues of how other economic external factors can influence business decisions, such as a change in industry regulation or a sudden price shift in a necessary production materials.

Managerial Economics

Managerial economics focuses on the microeconomic factors that are used in the decision-making process with an organization. Corporations make strategic decisions that can result in a profit or loss. Managerial economic principles guide how and why corporations make certain decisions.

Managerial economics apply to the public and private sectors, and for-profit and not-for-profit organizations alike. All organizations must address issues in the internal and external economies to remain solvent, as all organizations require a source of funding to continue operations.

The goal of managerial economics is to utilize the available resources, maximizing production while minimizing waste. While nonprofits may put their focus on raising donations, for-profits instead focus on sales of goods or services. Each organization wants to limit waste to maximize the overall usefulness of the available resources. Each uses the same principles to meet the associated goals of maintaining the funds necessary to continue working within the economy.

Both also require the same forms of attention and expertise, such as advertising and community or customer support, and require leadership to make decisions regarding the best way to negotiate current economic conditions.

Economics Oriented Associations

In the United States, the National Association for Business Economics (NABE) is the professional association for business economists. The organization's mission is "to provide leadership in the use and understanding of economics." In the United Kingdom, the professional organization is the Society of Business Economists.

RELATED TERMS
  1. Managerial Accounting

    The process of identifying, measuring, analyzing, interpreting, ...
  2. Economics

    Economics is a social science concerned with the production, ...
  3. Industrial Organization

    Industrial organization is a field of economics dealing with ...
  4. Economic Growth Rate

    An economic growth rate is a measure of economic growth, typically ...
  5. Economic Think Tank

    An economic think tank is an organization whose mission it is ...
  6. Applied Economics

    Applied economics refers to the use of economy-framed theories, ...
Related Articles
  1. Investing

    How Globalization Affects Developed Countries

    The increase in communications technology has companies competing in a global market.
  2. Insights

    Why Can't Economists Agree?

    There are many reasons why economists can be given the same data and come up with entirely different conclusions.
  3. Insights

    Is Infinite Economic Growth on a Finite Planet Possible?

    While the finite nature of Earth's resources limits the direction of economic growth, it does not mean that infinite economic growth is impossible.
  4. Taxes

    5 steps to forming a tax-exempt nonprofit corporation

    Before you tackle this challenge, know the challenges of forming and operating an official nonprofit organization.
  5. Insights

    Where To Find Economic Indicator Data For Brazil

    Once an emerging economic powerhouse, the Brazilian economy is now struggling. Here is the list of primary economic indicators and sources to get Brazil's economic indicators.
  6. Insights

    The History of Economic Thought

    Economics is a vital part of every day life. Discover the major players who shaped its development.
  7. Insights

    Economic Trends We Can All Profit From In 2013

    The National Small Business Association may not be optimistic about 2013, but we'll show you a few trends that suggest the economy can grow this year.
RELATED FAQS
  1. How does financial accounting differ from managerial accounting?

    Learn about the main differences between financial accounting and managerial accounting, including why one is highly uniform ... Read Answer >>
  2. How is marginal analysis used in making a managerial decision?

    Discover why understanding marginal analysis helps to identify the optimal distribution of resources and planning for an ... Read Answer >>
  3. Is the United States a Market Economy or a Mixed Economy?

    The United States is a mixed economy, combining elements of a true free market economy with governmental, economic controls. Read Answer >>
  4. Why are the Factors of Production Important to Economic Growth?

    Find out why the factors of production are critical for real economic growth, where wages rise and consumer goods costs fall ... Read Answer >>
  5. What are some common features of a mixed economic system?

    Look at a brief overview of the defining features of mixed economies and its perceived advantages and disadvantages Read Answer >>
  6. How is an economy formed and why does it grow?

    Find out how an economy forms and why it grows, including the role that financial markets play and how productivity increases ... Read Answer >>
Hot Definitions
  1. Receivables Turnover Ratio

    Receivables turnover ratio is an accounting measure used to quantify a firm's effectiveness in extending credit and in collecting ...
  2. Treasury Yield

    Treasury yield is the return on investment, expressed as a percentage, on the U.S. government's debt obligations.
  3. Return on Assets - ROA

    Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets.
  4. Fibonacci Retracement

    A term used in technical analysis that refers to areas of support (price stops going lower) or resistance (price stops going ...
  5. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  6. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
Trading Center