Managerial Economics: Microeconomics Concepts

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1
FIRST SEMESTER
Managerial Economics
Subject Code:1001 Contact Hours: 60
Work Load: 4hrs/week Credit Points: 04
Semester End Exam Marks: 80 Internal Marks: 20
OBJECTIVES:
1. To familiarize students with Micro Economic Concepts used in Decision Making.
2. To develop application and analytical skills by using these concepts to make managers effective in economic decision making.
Module: 1 (10 Hours)
Introduction to Economics - Introduction to Managerial Economics- concept, Nature,
Scope, & significance. Role of Managerial Economist in Decision making -Decision
Making Process in Managerial Economics, Difference between Micro and Macro
Economics, Fundamental Concepts- Opportunity Costs, Incremental Concepts,
Discounting Principle, Equimarginal Principle.
Module: 2 (10 Hours)
Demand and Supply Analysis –Determinants of demand, Law of Demand, Types of demand, Determinants of Demand, Elasticity of Demand - Price, Income, Cross,
Advertising and promotional elasticity Promotional Elasticity, Demand Forecasting -
Methods and Significance. Exercises on demand forecasting, Law of Supply,
Determinants of Supply, Elasticity of Supply.
Module: 3 (12 Hours)
Production Function - Cobb Douglas Production Function, Law of Variable
Proportion, Law of Returns to Scale, Isoquants, production function and Managerial decisions, Returns to scale.
Cost Concepts – Fixed, Variable, Average, Marginal Costs, Short Run and Long Run
Cost output relationship.
Module: 4 (12 Hours)
Introduction to Market Structures - Perfect Competition, Monopoly, Monopolistic
Competition, Oligopoly.
Pricing - Pricing policies in practice and pricing methods - Skimming and Penetration
Price, Cost plus Pricing, Transfer Pricing, Target Rate of Return Pricing. Price
Leadership, Resale Price Maintenance, Price Discrimination.
2
Module 5 ( 08 Hours)
Theories of firms and Profits theories : theories of firms and their managerial application,
Determinants of Short-term & Long-term

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