Managerial Economics
Subject Overview
Managerial Economics applies economic theory to managerial decision-making — demand analysis and indifference curve theory, production and cost theory with revenue curves, market structure and pricing (perfect competition, monopoly, oligopoly) and factor pricing, and macroeconomic tools (IS-LM analysis, national income, consumption function, inflation and trade cycles) relevant to business decisions. A 4-credit core theory paper.
Unit-wise Syllabus
4 units — click WhatsApp below to get the full notes for each
Unit 1: Demand analysis
Meaning, scope and role of managerial economics in decision making, opportunity cost principle, production possibility curve, demand function and determinants, demand elasticity (price, income, cross), demand estimation and forecasting, indifference curve analysis and consumer equilibrium
Unit 2: Production, cost and revenue
Production function, productivity and technology, short-run and long-run production, isoquants and least-cost input combination, producer's equilibrium, returns to scale, cost concepts and determinants, short-run and long-run and modern cost theory, revenue curves — total/average/marginal revenue and their relationships
Unit 3: Market structure and pricing
Perfect competition, monopoly, monopolistic competition and oligopoly (collusive and non-collusive) equilibrium, price leadership model, supply curves, commodity pricing practices and types, factor pricing — collective bargaining, rent, profit and interest rate theory
Unit 4: Macroeconomics for managers
Saving and investment function, consumption function, aggregate supply and demand, investment and foreign trade/budget multipliers, money market and liquidity preference, IS-LM analysis, national income measurement and limitations, Keynes's psychological law of consumption, inflation types/causes/effects/control, unemployment trade-off, trade cycle theories