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In the simplest of words, Business Economics is the term given to the act of maintaining a fine balance between infinite economic wants and limited resources. It is concerned with the optimum allocation and utilization of the limited resources to reap maximum economic benefit. The theories of business economics are often applied in the context of larger economic entities such as firms, nations or a business organization.

essential components of business economics

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business economics assignment sample

Business Economics Theory: The theory of business economics consists of various techniques such as the forces of demand and supply, cost and consumption. It attempts at analysing the existing market factors to examine and evaluate the potential growth of the business.

Some of the other objectives of Business Economics are to study the periodic growth in the quantity and quality of Human resources and other non-human resources. 

Business Economics as a sub-discipline of applied economics takes into account the various elements that have a bearing on the gross output. The purpose of business economics studies is to maximize production with the given resources. It aims to plan and allocate the available resources in such a way that yields the maximum benefit to the organization. The subject matter experts at My Assignment Service are proficient in the industrial applications of business economics and assure you of comprehensive business economics help with your assignment.

A better understanding of the vital factors involved in the production process help businesses in making an informed decision regarding the utilization of the resources. There are alternative uses of limited resources within a business process. Business economics uses current data to allocate the available resources to make a prudent business decision. Business economics also takes into account external factors that are likely to have a profound impact on output such as political and social issues. 

Therefore, as a discipline, it is also closely related to data analytics and risk assessment. It is a sub-discipline of Applied Economics which is concerned with developing a set of practices to effectively manage the limited resources.

The Essential Components of The Business Economics Theory

1) Operations research: This process refers to the process of conducting research into the market forces of demand and supply along with considering customer's tastes and preferences, industrial trends, and the existing political ecosystem to assess what to produce and how much to produce. 

Secondly, Operations research also determines the operational costs and estimates the requirement of resources such as land, labour, and capital required to produce.

2) Theory of decision making: Based on the research and analysis conducted, the business management of any organization makes informed decisions about what to produce and how much to produce.

3) Mathematics: Further mathematical calculations are drawn to ascertain the exact allocation of resources in the production process to keep the business profitable and to maintain the balance of payments. 

4) Capital Budgeting: This is a quantitative business technique that aims at analysing the merit and worth of an organization in relation with its expenditures.

5) Cost Analysis: This technique is concerned with weighing against each other, the pros and cons of a particular business plan. It is used to relatively analyse and compare different business plans.

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