The course in Managerial Economics attempts to build a strong theoretical foundation for Management students. The course is mainly analytical in nature and focuses on clarifying fundamental concepts from microeconomic viewpoint. The students are expected to study and analyses the dynamics of managerial decision making through this course. Also wherever possible, students are expected to study, analyses and interpret empirical evidence and case studies available currently on various basic concepts.
1. Definition, Nature and Scope of Managerial Economics, Managerial Economics and Microeconomic and Macroeconomics. Managerial Economics and decision-making. Definitions of basic concepts:
a. Positive and normative approach
c. Marginal analysis
d. Opportunity Cost.
e. Economic Model.
f. Statics and Dynamics. (8)
2. Meaning and determinants of demand. Demand Function. Law of Demand, Market Demand, Elasticity of demand. Types of elasticity. Measurement of elasticity. Significance and uses of the elasticity. Methods of demand estimation. Demand forecasting. Forecasting of an established product. Forecasting of a new product. (8)
3. Production Function. Law of Variable Proportions. Law of supply. Elasticity of supply. Measurement of elasticity. Significance and uses of the concept of elasticity. (6)
4. Costs of production. Private costs and Social Costs. Accounting Costs and economic costs. Short run and Long Run costs. Economies of scale. Cost estimation. Methods of cost estimation and cost forecasting. Cost reduction and cost control. (6)
5. Pricing under various markets including: Perfect Competition, Monopoly, Monopolistic competition, oligopoly. Cartels. Price discrimination. Measurement of Monopoly Power. (8)
6. Pricing Strategies and Methods – Cost plus pricing. Marginal cost pricing. Cyclical pricing. Penetration Pricing. Price Leadership. Price Skimming. Transfer pricing.