Managerial Economics

Syllabus

BCOMGE 101-18/BBAGE 101-18 Managerial Economics

Unit-I

Introduction to Managerial Economics: Managerial Economics: Meaning, Nature, Scope & Relationship with other disciplines, Role of managerial economics in decision Making, Opportunity Cost Principle, Production Possibility Curve, Incremental Concept,Scarcity Concept.

Demand and the Firm: Demand and its Determination: Demand function; Determinants of demand; Demand elasticity – Price, Income and cross elasticity. Use of elasticity for analyzing demand, Demand estimation, Demand forecasting, Demand forecasting of new product.

Indifference Curve Analysis: Meaning, Assumptions, Properties, Consumer Equilibrium, Importance of Indifference Analysis, Limitations of Indifference Theory.

Unit-II

Production Function: Production function Meaning, Concept of productivity and technology, Short Run and long run production function Isoquants; Least cost combination of inputs, Producer’s equilibrium; Return to scale; Estimation of production function.

Theory of Cost: Cost Concepts and Determinants of cost, short run and long run cost theory, Modern Theory of Cost, Relationship between cost and production function.

Unit-III

Revenue Curve: Concept of Revenue, Different Types of Revenues, concept and shapes of Total Revenue, Average revenue and marginal revenue, Relationship between Total Revenue, Average revenue and marginal revenue, Elasticity of Demand and Revenue relation.

Market Structure: Market Structure: Meaning, Assumptions and Equilibrium of Perfect Competition, Monopoly, Monopolistic Competition, Oligopoly: Price and output determination under collusive oligopoly, Price and output determination under non-collusive oligopoly, Price leadership model.

Unit-IV

Pricing: Pricing practices; Commodity Pricing: Economics of advertisement costs; Types of pricing practices

Factor Pricing: Demand and supply of factor of production; Collective bargaining, Concept of rent, profit, interest- Rate of return and interest rates; Real vs. Nominal interest rates. Basic capital theory–Interest rate and return on capital. Measurement of profit.