Managerial Economics: Meaning, Nature, Scope, & Significance. Uses ofManagerial Economics. Role and Responsibilities of Managerial Economist.Relationship of Managerial Economics with Statistics, Accounting andOperations Research. The Basic process of decision making.
Opportunity Costs, Incremental Principle, Time perspective, Discounting andEqui-Marginal principles.Theory of the Firm: Firm and Industry, Forms of Ownership, Objectives ofthe firm, alternate objectives of firm. Managerial theories: Baumol’s Model,Marris’s Hypothesis, Williamson’s Model. Behavioural theories: Simon’sSatisficing Model, Cyert and March Model.Agency theory.
Law of Demand, Exceptions to the Law of Demand, Elasticity of Demand –Classification of Price, Income & Cross elasticity, Advertising andpromotional elasticity of demand. Uses of elasticity of demand forManagerial decision making, Measurement of elasticity of demand. Law ofsupply, Elasticity of supply. Demand forecasting: Meaning & Significance,Methods of demand forecasting. (No problems)Note:Illustrative numerical examples to be used to explain the concepts.
Concepts, Types of cost, Cost curves, Cost – Output Relationship in the shortrun and in the long run, LAC curve.
Concepts, production function with one variable input - Law of VariableProportions. Production function with 2 variable inputs and Laws of returnsto scale. Indifference Curves, ISO-Quants & ISO-Cost line.Economies ofscale, Diseconomies of scale.
Perfect Competition, Features, Determination of price under perfectcompetition.Monopoly: Features, Pricing under monopoly. Price Discrimination.Monopolistic Competition: Features, Pricing Under monopolisticcompetition, Product differentiation.Oligopoly: Features, Kinked demand Curve, Cartels, Price leadership.
Full cost pricing, Product line pricing, Product life cycle pricing.Pricing Strategies: Price Skimming, Penetration Pricing, Loss leader pricing,Peak Load pricing.
Determinants of Short-term & Long-term profits. Classification –Measurement of Profit. Break Even Analysis – Meaning, Assumptions,Determination of BEA, Limitations, Uses of BEA in Managerial decisions.