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Course Outline of Paper MANAGERIAL ECONOMICS
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MBA 1ST SEMESTER
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broad topicsub topic
no of lectures
datecourse outcome
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1. Introduction to Managerial Economics
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(a) Basic problems of an economic system 1to get a basic idea of the subject managerial economics
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(b) Goals of managerial decision making 1goals pursued by firms
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(c) Resource allocation using PPC1
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Demand AnalysisDemand Functions - Law of Demand, Explaining the law of demand, Violations of the Law of Demand, Shifts in Demand; 2to get idea about the nature and importance of demand.
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Elasticity of Demand: Price Elasticity (at a point and over and interval), Factors affecting price elasticity, Price elasticity and Change in Total Revenue, AR, MR and Price elasticity, Range of Values of Price Elasticity; Income Elasticity, Inferior, Superior and Normal goods, Income Elasticity and Share in Total Expenditure; Cross-Price Elasticity, Substitutes and 2to get idea about elasticity of demand and how the knowledge of elasticity helps in understanding nature of goods.
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Test 1
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Indifference curves, budget line and consumer equilibrium2to understand optimum purchase of goods from a given income of buyers using the concept of indifference curves and budget lines.
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C. Introduction to methods of demand estimation (concepts only)
1different methods of demand forecasting
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3. Production and Cost AnalysisProduction Function, Short Run and Long Run, Production with One Variable Input, Total Product, Average and Marginal Products, Law of Variable proportions, Relationship between TP, AP and MP.1to study the producer's side of economics and the how input usage decision is taken by the producer.
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B. Short Run Costs of Production, Fixed and Variable Costs, Short Run Total, Average and Marginal Cost and Relationship between them, Short Run Cost Curves, Relationship between AVC, MC, AP and MP; Long run cost curves, Relationship between LAC and SAC, Economies of Scale and Scope. C. Production with Two Variable Inputs, Isoquants – Characteristics,2the different kinds of costs encountered by the producer and their analysis from the economic point of view.
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Production with Two Variable Inputs, Isoquants – Characteristics, Marginal Rate of Technical Substitution, Laws of Returns to Scale, Isocost Curves, * # Finding the Optimal Combination of Inputs, Production of a given output at Minimum Cost, Production of Maximum Output with a given level of Cost, Expansion Path, Finding the Long Run Cost Schedules from the Production Function, 2to understand the optimal usage of inputs to generate maximum output using the concept of isoquant and isocost
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D. Law of supply, elasticity of supply, market equilibrium, changes in equilibrium.1how supply is generated to cater to market demand.
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test 2
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4. Alternate Goals of Managerial FirmsProfit maximization (B) Revenue maximization (C) Managerial utility maximization2to understand the different business objectives the managers pursue in a firm
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5. Managerial Decision Making under Alternative Market StructuresCharacteristics of Perfect Competition, #Profit Maximization in Competitive Markets, Output Decision in the Short Run, Shut Down Point, Short Run Supply for the Firm and Industry; Output Decision in the Long Run, Break Even Point, Long Run Supply for the Perfectly Competitive Industry3the ideal market structure perfect competition and determination of price and output in such a market.
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Price and output decision under different market structure – Monopoly, 2decisions taken in a monopoly firm
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Monopolistic Competition, Oligopoly – cartel, price leadership.2two common market structures
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Pricing DecisionsPrice Discrimination under Monopoly, 1to understand the common practice of price discrimination.
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test 3
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Transfer Pricing. Market Failure 1to understand when market price rule does not apply
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 Game theory &Asymmetric information2latest concept of managerial economics, the tool of game theory in business decision making and the idea of markets with asymmetric information
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discussion of numerical problems and sample questions 2
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test 4
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Quiz
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topic based presentation to be held in between lectures
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