Economics is often considered as the ‘Queen of Social Sciences’ as it deals with the individual human behaviour as well as the society’s problems of scarcity, choice and exchange. Branched broadly as Macro and Microeconomics, it studies the production, distribution as well as overall consumption of goods and services. Business Economics is concerned with the application of economics to the business areas, i.e. how business organizations carry out the optimum utilisation of resources. In this blog, we will explore more about the meaning, nature and scope of Business Economics as well as the diverse career prospects it offers!
Recommended Read: Nature and Scope of Economics
This Blog Includes:
- What is Business Economics?
- Characteristics of Business Economics
- Importance of Business Economics
- Scope of Business Economics
- Nature and Scope of Business Economics
- Scope of Business Economics as a Career: Job profiles
- Other Job Profiles
- Solved Question on Scope of Business Economics
What is Business Economics?
Also referred to as Managerial Economics, Business Economics study the allocation and optimization of a firm’s resources to achieve the maximization of profit and accomplish the target goals. In simple terms, it applies Microeconomics to a business firm’s operational issues and decision-making processes and thus is actually applied economics. It draws an interdisciplinary bridge between economic principles & theories and business. A business economist helps the business manager identify operational problems and find possible solutions for them. It comes under the scope of business economics to apply economic laws, regulations and models for the formulation and implementation of business policies.
Characteristics of Business Economics
To comprehend the vast scope of business economics, it is important to understand the salient features of this imperative branch of Applied Economics. Take a look at the following characteristics of Business Economics:
- It mainly deals with the decision-making process in a business enterprise and that’s why the unit of study in Business Economics is referred to as the business enterprise or firm we are studying.
- It is microeconomic in nature because it mainly deals with various business aspects like consumer behaviour, price determination of a commodity, profit levels, revenue, etc.
- The major economic principles and concepts used in Business Economics include the theory of the firm, production and cost analysis, resource allocation, profit analysis, etc.
- Along with assessing how and why businesses operate and carry out the optimum allocation of resources, price determination, etc. but it also studies the implications and consequences of their actions and policies.
Importance of Business Economics
Business economics plays an important role in the decision making of an organization. It is a process of selecting the best course of action from available alternatives. The role of business economics includes:
- Identify problems and find solutions
- Identify internal and external business factors
- Frame business policies
- Establish a relationship between economic factors
Scope of Business Economics
Business Economics covers two different categories, macroeconomics and microeconomics. Both the sectors cover different parts of the business economics as:
- Microeconomics applies to internal or operational issues that arise within the organization and fall under the purview of management.
- Macroeconomics focuses on external or environmental issues that influence the functioning and performance of the business
Nature and Scope of Business Economics
To understand the nature and scope of Business Economics, it is important to understand its different applications and aspects. Let’s explore the varied aspects of Business Economics and their Salient Features:
Business Economics as a Science
Econometrics, Statistics and Mathematics are actually referred to as decision sciences. Business Economics actually combines these decision sciences with economic theory in order to formulate the best strategies for helping businesses accomplish their goals and objectives.
Business Economics as an Art
Art corresponds to the practical application of knowledge and business economics also requires the application of certain theories and strategies to come up with suitable solutions for achieving the set objectives.
Practical in Approach
Simplifying the complex problems faced by businesses, organisations and enterprises is at the core of business economics. But as compared to the theoretical nature of Microeconomics, Business Economics is more practical and pragmatic in nature as it works on the real-world problems faced by business and suggest innovative solutions.
Applications of Business Economics
The scope of Business Economics is not only limited to working on the business problems but extends towards analyzing consumer behaviour, demand and supply and forecasting trends too. By estimating the incoming demand and supply, it helps firms in determining the arrangement of different factors of production such as labour, capital, equipment, etc. Further, it also facilitates production and cost analysis, assesses the market structure and pricing policies, carries out risk analysis and thus assists enterprises in resource allocation, inventory management and maximization of profit.
Scope of Business Economics as a Career: Job profiles
Now that you are familiarized with what this field is about and the immense scope of Business Economics, you must also know that it has a wide range of job opportunities on offer for those with a degree or qualification in this area of study! Here are the major job profiles you can explore in Business Economics:
Also known as a management consultant, a Business Analyst assists an organization in improving their different processes as well as systems. They put forward various suggestions related to how revenues are increased and profitable business decisions can be made to ensure cost reduction. Coming under the vast scope of Business Economics, this job profile comprises different roles and responsibility to facilitate enterprises in decision-making with the help of data analysis, services as well as software. They ideally do budgeting and forecasting, planning and monitoring, pricing as well as reporting.
Must Read: Business Management Courses
The primary responsibility of a financial manager is to deal with a firm’s financial issues and maintain the financial health of an organisation. Moreover, their main objective is to come up with financial related reports, direct investment activities as well as formulate proper strategies to ensure the accomplishment of long-term goals. It is amongst the sought-after job prospects under the wider scope of Business Economics. Further, Financial Management also refers to analysing the finance-related budgeting and coming up with cost reduction policies and techniques for the organisation.
To know more, check out Scope of Financial Management!
Market Research Specialist
Market research specialists are responsible for gauging as well as examining the marketing strategies for the brand. Their main aim is to understand the interest of the target consumers when they buy any product and thus they determine the potential profit as well as market size accordingly. Applying the principles and theories of Business Economics in Marketing, these specialists present sales reports, conduct research regarding marketing strategies and budgets as well as execute the supervised marketing research projects.
Taking up the role of the Environmental Economist, you will be required to conduct economic analysis and research regarding environmental conservation and come with proper research policies. Amongst the lesser-known opportunities under the career scope of Business Economics, environmental economists analyze the costs and benefits of different activities and their implications on the environment.
Related Read: How to Become an Environmentalist?
Securities and Commodities Trader
Another prominent area to explore under the scope of Business Economics, Securities and Commodities Trading offers lucrative job opportunities with high salary packages. As a Securities and Commodities Trader, you will be needed to make bids and offer for buying or selling the scrutinies. You will also carry out the necessary negotiation on proper sales terms and conditions. Moreover, these traders are authorized to sell the products or services apart from buying foreign currencies, commodities, stocks etc.
Must Read: Stock Market Courses
Other Job Profiles
Along with the aforementioned job opportunities, here are some other prospects you can explore to avail the career scope of Business Economics:
- Professional Economist
- Financial Risk Manager (FRM)
- Data Analyst
- Financial Planner
- Financial Controller/Financial Economist
- Equity Analyst
- Cost Accountant
- Economic Researcher
- Business Economist
- Agricultural Economist
- International Economist (Specialization)
- Industrial Economist (Specialization)
- Labour Economist (Specialization)
- Investment Analyst
Solved Question on Scope of Business Economics
A. buyer income
B. buyer behavior
C. the relationship between a buyer and seller
D. number of buyers certainly buying from the competitors
Answer: Option B
Business Economics is the study of the allocation and optimization of a firm’s resources to achieve the maximization of profit and accomplish the target goals. The scope of the field is very large as it deals with internal and external business factors.
Hopefully, this blog has helped you gain a better understanding of nature and scope of Business Economics as a career. Aspiring to pursue a career in Economics? Our Leverage Edu experts are here to guide you in selecting the right course and university which aligns with your interests and career aspirations and equips you with immense exposure to build a rewarding career in this field! Sign up for an e-meeting with us today!