Managerial Economics
Managerial Economics
Managerial Economics
Module I
Introduction: Basic economic problems – Economic System – Micro and Macro economics –
Managerial economics – Nature and scope – Fundamental concepts of Managerial economics –
Incremental concept, Discounting concept, Opportunity cost concept, Time concept, Equi-
marginal concept – Business Decision making – Certainty, Risk and Uncertainty – Applications
of economics in managerial decision making.
Module II
Demand Analysis: Demand – Demand function – Demand distinctions – Elasticity of Demand –
Different types of elasticity – Applications – Measurement of Elasticity. Demand forecasting –
Techniques. Utility – Equilibrium of the consumer using cardinal and ordinal utility
(Indifference curves) – Income effect and substitution effect.
Module III
Supply: Theory of Production – Production function – Laws of Returns – Economies of scale
and Economies of scope – Isoquants – Best Production possibility – Cost Analysis – Cost
concepts – Short run and long run cost curves – Managerial uses of Long run cost curves –
Revenue Analysis – Revenue curves.
Module IV
Market: Definition – Classification of Markets – Importance of understanding market structure –
Different types of market based on competition – Perfect and Imperfect competition – Monopoly
– Price and output determination under perfect competition, monopoly, monopolistic competition
and oligopoly – Kinked Demand curve – Monopoly price discrimination and its conditions –
Non Price competition.
Module V
Instruments of Macro Economic Policy: Circular Flow of Income – National Income – Concepts
of National Income – Methods of measuring National Income – Product Approach, Income
Approach and Expenditure Approach – Business Cycle – Inflation and Deflation – Fiscal Policy
– Budget Deficit and Debt – Government Budgetary Policy – Monetary Policy – Instruments of
Monetary Policy – Balance of Payment.
References
1. P.L. Mehta – Managerial Economics Analysis, Problems and Cases – Sultan Chand &
Sons
2. V.L. Mote – Managerial Economics – Tata McGraw Hill
3. K.K. Dewett – Modern Economic Theory: Micro and Macro Analysis – Orient Book
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