The term industrial economics stands for the study of the application of micro economic concepts on the problems and the functioning processes of business enterprises. The changes in market structures have created large scale changes in the workings of industries and the industrial structures have changes extensively. There has been a sudden demand for looking at industrial workings with an economical perspective. The study also looks at the functioning of firms of all size and structures in its purview. It studies the functioning of shops down the street as well as multinational giants like Walmart, Subway etc.
The basic question answered in the study of industrial economics is that of the levels in which the capacity of the firm is utilized to the optimum, the methods and the extent to which product differentiation is carried out.In the study of industrial economics there is perhaps always an international approach . The trade –off between in shore and off-shore is answered in the study of industrial economics. The subject also studies the degree of competitiveness of a market and the helps in defining the core competence of the firm in the cut throat competition. Theoretical models are extensively used in its research.
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