Managerial Economics

MANAGERIAL ECONOMICS
Course Objectives:
Business Decision Making has become extremely complex due to ever growing complexity of
business world and business environment in present situation. The basic function of business
managers is to take appropriate decision on business matters, to manage and organize resources, and
to make optimum use of available resources with the objective of achieving the business goals.
Business Economics helps in equipping prospective and present managers with economic concepts,
economic theories, tools and techniques of economic analysis applied to business decision making.
UNIT-I
1. Introduction to Economics (3 Hours)
(a) Scarcity and Efficiency (0.5 Hours)
(b) The three problems of economic organization, Market, Command, and Mixed Economies
(0.5 Hours)
(c) The Market Mechanism (0.5 Hours)
(d) How markets solve the three Economic problems? (0.5 Hours)
(e) The economic role of government, Nature and Goals of Firm, PPF (0.5 Hours)
(f) Nature and scope of Managerial Economics (0.5 Hours)
Case Study Presentation –I

UNIT-II
2. Supply and Demand Analysis (7.5 Hours)
(a) The Demand schedule, the Demand curve, Demand shifts, Elasticity of Demand – price
Elasticity of Demand (1.5 Hours)
(b) Calculating Elasticities, Elasticity and Revenue (1 Hour)
(c) Income Elasticity of Demand, Cross Elasticity of Demand (1 Hour)
(d) Analysis of supply – The Supply Schedule, The Supply Curve, Shifts in supply, Price
Elasticity of Supply (1 Hour)
(e) Equilibrium of Supply and Demand Equilibrium with Supply and Demand curves
(1 Hour)
Page 1 of 3
(f) Effect of a Shift in Supply or Demand (1 Hour)
(g) Interpreting changes in Price and Quantity, Simultaneous Shifts of Supply and Demand
(1 Hour)
Case Study Presentation –II
ASSIGNMENT
UNIT-III
3. Production and Cost analysis (4.5 Hours)
(a) Production analysis: Basic concepts, The Production Function, Total, Average, and
Marginal product (1.5 Hours)
(b) The Law of Diminishing Returns, Production with two variable inputs, Returns to scale
(1.5 Hours)
(c) Costs: Cost concepts, the link between production and costs, Short run and long run cost,
cost curves. Least cost factor combination for a given output (1.5 Hours)
Case Study Presentation –III
Class Test (20 Marks): (It covers from Topic/Unit no 1 to 3 of the syllabus)
UNIT-IV
4. Market Structure: Perfect Competition: (6 Hours)
(a) Characteristics of a Perfectly Competitive Market, Supply and Demand in Perfect

Competition, Short Run Equilibrium of the Competitive Firm, Long Run Equilibrium of the
Competitive Firm, Effects of Taxes on Price and Output (1.5 Hours)
(b) Monopoly: Monopoly-short run and long run equilibrium Price Discrimination, Types of
Price Discrimination, Natural Monopolies. (1.5 Hours)
(c) Imperfect Competition: Imperfect Competition, Demand Curve, Monopolistic Competition,

Product Differentiation - Types of Product Differentiation (1.5 Hours)
(d) Oligopoly: Kinked Demand Curve, Cartel Formation, Market-Sharing Cartels, Price
Leadership. (1.5 Hours)
UNIT-V
5. Introduction Macro Economic (9 Hours)
(a) Microeconomics Vs. Macroeconomics, Goals of Macroeconomic policy, Objectives and

Instruments of Macroeconomics (3 Hours)
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(b) Measuring National output / Income: Circular flow in income – two, three and four sector,
Concept of national income and its components, Methods of measuring national Income, Real Vs.
Nominal, Price indices and its applications. (3 Hours)
(c) Monetary policy and Fiscal policy: Money, Measures of money stock, Credit creation and
Money multiplier, Types of inflation, Economic impacts of inflation, RBI and Instruments of
monetary policy Fiscal instruments, Tax structure, Types of deficits, Fiscal policy and stabilization
(3 Hours)
Case Study Presentation –V
Total (30 Hours)

Text Book
1. Business Economics: Micro and Macro Analysis by Dr. H L AHUJA, S Chand and Co Pvt
Ltd
References Books:
1. Managerial Economics by Dr. H L AHUJA, S Chand and Co Pvt Ltd
2. Managerial Economic, Principle and Worldwide Applications Dominick Salvatore and

Ravikesh Srivastava, Oxford Higher Education, 2015.
3. Economics Lipsey and Chrystal,Oxford Higher Education, 2015.
4. Managerial Economics C R Thomas and S C Maurice, TMH, 2015.
5. Microeconomics R Pindyck and D Rubinfeld, Pearson, 2013.
Page 3 of 3

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1. Introduction to Economics (3 Hours)

(a) Scarcity and Efficiency (0.5 Hours)

(f) Nature and scope of Managerial Economics (0.5 Hours)

Case Study Presentation –I

2. Supply and Demand Analysis (7.5 Hours)

(b) Calculating Elasticities, Elasticity and Revenue (1 Hour)

(c) Income Elasticity of Demand, Cross Elasticity of Demand (1 Hour)

Case Study Presentation –III

4. Market Structure: Perfect Competition: (6 Hours)

(a) Characteristics of a Perfectly Competitive Market, Supply and Demand in Perfect

(c) Imperfect Competition: Imperfect Competition, Demand Curve, Monopolistic Competition,

5. Introduction Macro Economic (9 Hours)

(a) Microeconomics Vs. Macroeconomics, Goals of Macroeconomic policy, Objectives and

Total (30 Hours)

1. Managerial Economics by Dr. H L AHUJA, S Chand and Co Pvt Ltd

2. Managerial Economic, Principle and Worldwide Applications Dominick Salvatore and

3. Economics Lipsey and Chrystal,Oxford Higher Education, 2015.

4. Managerial Economics C R Thomas and S C Maurice, TMH, 2015.

5. Microeconomics R Pindyck and D Rubinfeld, Pearson, 2013.

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