Economics is a subject which is really useful in the World of Business. As you see you get to learn a lot of things from this particular subject regarding the business, the society as a whole, or things of a small factor, or how manage things according to the size of the business, how to choose the correct goods according to the demand, etc. Economics offers us a lot of knowledge regarding commerce and art stream and some regarding the non-medical, and medical stream too and etc. which can excel his or her career. So you see Economics is an important subject. Let me tell you about the benefits of economics subjects when you want to opt your career in a business organisation or business enterprise or business administration or anything related to the Business World. As this is the subject which teaches us that there are some little things in life which deals with the drastic change, and if you don’t go with it in correcting it, you can suffer later. So let me tell you about the benefits of economics subject, and how is it helpful?
Economics is a subject that revolves around allocation of resources, it talks about how to produce goods and services, i.e. through which technique, what to produce, and for whom to produce which are basically the central problems of an economy.
So you see there are a lot of things being taught in economics which is very useful. Just for an instance, if you are an owner of a shop, you should know which products you should keep in your shop, i.e., which products will gain more attraction to the customers, in economics, a whole topic of demand is given. Suppose if the price of tea rises then the customers start buying more of coffee and less of tea, or suppose if the price of gel pen increases then the customer starts purchasing a ball pen, there is an inverse relationship and such type of goods are known as relative goods. Let me give you one more example, if a consumer’s income has been increased, he or she will prefer in buying more of normal goods and less of inferior goods (griffin goods like wholegrain etc.) and if there is a decrease in the income of the consumer’s income then he or she will refer to buy more of inferior goods and less of normal goods.
These days a customer gets attractive though advertisements, magazines and thinks of using the products whose brand ambassador is there favorite celebrity or some famous celebrity. A shopkeeper must know the best selling goods. Through economics one learns a lot about the business and not just about the shop keeping but overall in the Business World. Economics do teach us about the revenue, profits, gross profit, net profit, etc.
When you are a costumer you basically go with the things you like but when you are on the other side that is when you are running up a business enterprise you come to know about how important “demand” and “supply” words are. Because when you are a producer you need to work smartly, you need to take care about the price equilibrium and market equilibrium, you have to make sure that the products demanded by customers are supplied from you equally.
Economics talk about the methods through which profit can be generated.
There is a wide scope of economics, like:
Demand: When you are running an enterprise you make sure about the goods or products which has the maximum level of demand and accordingly you calculate the cost of inputs and materials which will be used to make those products, you also work according to the future, that is, for instance if the summers are about to come, you know that mostly the things which will attract people would be related to cold, like ice-cream and etc. So demand forecasting is an important thing when you are running an enterprise or a business organisation or a business administration or working in them. The most important thing for a producer is demand itself, as he or she has to produce goods according to the demand of costumers to achieve market equilibrium. Because then there will be no loss of a producer as to if he or she produced more of goods then demanded then he or she is in loss and even if the producer produced the goods demanded by the customers less, then also the producer can suffer loss, though his or her all the goods will be sold but he or she can earn more by producing the goods more as to there is still a huge demand occurring for the same product in the market, because if he or she doesn’t produces the following product the customers will purchase the same product from somewhere else which means that he or she was able to achieve more of a profit but left the chance like that only.
Resource allocation: This is an important thing which every manager keeps in mind, and is taught in economics very informatively. Resource allocation is basically how a manager uses less of inputs and produces or generates more of outputs from it, or if the prices of raw materials used in the product, or the prices of inputs used in the outputs rises then which supplementary good should be used by the manager to bring out the correct demanded output. Plus there are wants infinite but resources less, so to overcome this problem economics helps us find a solution regarding it.
Advertising: When you advertise a product, the following product gains a lot of demand as compared to before times. As now people are aware of the product through television or billboards, etc. For an instance, when we are siting in front of the television watching some movie and an ad pops out, somewhere deep in mind, we get attractive to the advertisement and feel like to purchase the following product. So advertising plays a key ole in marketing any kind of a good or service.
Profit management: Each and every person working in an enterprise or an organisation or an administration thinks about making profit. But making profit is not that easy, making profit needs to be taken care of every single detail regarding the business. One needs to work on the products which are demanded at its maximum level. One has to go through each and every factor bit by bit through which the business enterprise or the business organisation, or the business administration could earn the utmost profit in that financial year. The basic thing to earn profit is market equilibrium where your supply is totally equal to the goods and services demanded by the customers.
So you see there is a wide scope of economics, it itself is a very important subject in BBA ( Bachelors of Business Administration). This subject is an important pillar in a business enterprise or in a business administration, or in a business organisation. It teaches us a lot about the World of Business, this subject is actually very interesting, and informative. A lot of things regarding the demand, supply, of how a producer should act smartly, or about the macro level and micro level things around us are being taught in this subject. So this is the reason why economics is being taught in BBA and if you have BA and are looking forward to step in the business world then economics is the right subject for you..
Nature of Business Economics : Traditional economic theory has developed along two lines; viz normative and positive. Normative focuses on prescriptive statements, and help establish rules aimed at attaining the specified goals of business. Positive, on the other hand, focuses on description it aims at describing the manner in which the economic system operates without staffing how they should operate.
The emphasis in business economics is on normative theory. Business economic seeks to establish rules which help business firms attain their goals, which indeed is also the essence of the word normative. However, if the firms are to establish valid decision rules, they must thoroughly understand their environment. This requires the study of positive or descriptive theory. Thus, Business economics combines the essentials of the normative and positiveeconomic theory, the emphasis being more on the former than the latter.
Demand Analysis and Forecasting : A business firm is an economic organisation which transform productive resources into goods to be sold in the market. A major part of business decision making depends on accurate estimates of demand. A demand forecast can serve as a guide to management for maintaining and strengthening market position and enlarging profits. Demands analysis helps identify the various factors influencing the product demand and thus provides guidelines for manipulating demand.
Demand analysis and forecasting provided the essential basis for business planning and occupies a strategic place in managerial economic. The main topics covered are: Demand Determinants, Demand Distinctions and Demand Forecastmg. 6 June 2020