COURSE OBJETIVES:
The paper seeks to equip the students with the analytical tools of Economics and apply the same to rational managerial decision-making. It further seeks to develop economic way of thinking in dealing with practical business problems and challenges.
Unit – I Nature & scope of managerial economics; nature of marginal analysis; alternative objectives of business firm; cardinal utility theory; indifference curve technique and the theory of consumer choice; consumer surplus; price, income an substitution effects; demand elasticity; demand estimation and forecasting; relationship between price elasticity and marginal revenue.
Unit – II Law of variable proportions; laws of return; optimal input combination; output-cost relation; engineering cost curves; technological change and production decisions; revenue curves of a firm; duopoly analysis using reaction curves; price-output decisions under alternative market structures; shut-down points; Baumol’s sales maximization model, advertising and price-output decisions.
Unit – III Collusive behaviour of firms; cartel behaviour; game theory and strategic behaviour; product differentiation and price discrimination; price-output decision in multi-plant and muti-product firms; managerial theories of the firm; general pricing strategies; special pricing techniques – limit pricing, peak load pricing and transfer pricing; dumping analysis; pricing of public utilities.
Unit – IV Risk analysis; investment and capital replacement decisions; locational choice of a firm; measures of national income; business cycles; operative aspects of macroeconomic policies; inflation analysis; tariff analysis.
Suggested Readings:
1. Hirschey, Mark, Managerial Economics, Thomson Learning, Bangalore.
2. Monroe, Kent B., Pricing-Making Profitable Decisions, MacGraw-Hill, New York.
3. Keat, Paul B., and Philip K.Y. Young, Managerial Economics – Economic Tools for Today’s Decision Makers, Pearson Education Delhi.
4. Salvatore, Dominick, Managerial Economics in a Global Economy, Thomson Learning.
Note:
1. One case study be discussed –per unit – in the class.
2. Instruction for External Examiner: The question paper will have of two sections. Section ‘A’ shall comprise 8 questions (2 questions from each unit). The students will be required to attempt four questions (one question from each unit). Section ‘B’ will contain one CASE STUDY which will be compulsory. All the five questions will carry equal marks.
The paper seeks to equip the students with the analytical tools of Economics and apply the same to rational managerial decision-making. It further seeks to develop economic way of thinking in dealing with practical business problems and challenges.
Unit – I Nature & scope of managerial economics; nature of marginal analysis; alternative objectives of business firm; cardinal utility theory; indifference curve technique and the theory of consumer choice; consumer surplus; price, income an substitution effects; demand elasticity; demand estimation and forecasting; relationship between price elasticity and marginal revenue.
Unit – II Law of variable proportions; laws of return; optimal input combination; output-cost relation; engineering cost curves; technological change and production decisions; revenue curves of a firm; duopoly analysis using reaction curves; price-output decisions under alternative market structures; shut-down points; Baumol’s sales maximization model, advertising and price-output decisions.
Unit – III Collusive behaviour of firms; cartel behaviour; game theory and strategic behaviour; product differentiation and price discrimination; price-output decision in multi-plant and muti-product firms; managerial theories of the firm; general pricing strategies; special pricing techniques – limit pricing, peak load pricing and transfer pricing; dumping analysis; pricing of public utilities.
Unit – IV Risk analysis; investment and capital replacement decisions; locational choice of a firm; measures of national income; business cycles; operative aspects of macroeconomic policies; inflation analysis; tariff analysis.
Suggested Readings:
1. Hirschey, Mark, Managerial Economics, Thomson Learning, Bangalore.
2. Monroe, Kent B., Pricing-Making Profitable Decisions, MacGraw-Hill, New York.
3. Keat, Paul B., and Philip K.Y. Young, Managerial Economics – Economic Tools for Today’s Decision Makers, Pearson Education Delhi.
4. Salvatore, Dominick, Managerial Economics in a Global Economy, Thomson Learning.
Note:
1. One case study be discussed –per unit – in the class.
2. Instruction for External Examiner: The question paper will have of two sections. Section ‘A’ shall comprise 8 questions (2 questions from each unit). The students will be required to attempt four questions (one question from each unit). Section ‘B’ will contain one CASE STUDY which will be compulsory. All the five questions will carry equal marks.
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