This course on managerial economics is designed for management students. It seeks to integrate principles of economics with business decision making and policy formulation. The three main themes are economic behavior of consumers/customers, producers/managers, and market and cost structures. The course aims to apply economic reasoning to topics like marketing, finance, and organization. Students will learn tools like demand analysis, production and cost theories, and market structures to address typical business problems. Assessment includes presentations, class participation, and assignments. The course will be taught through lectures, discussions, case studies and problem solving.

1. Professor contact details <br />Name: Dr. O.P.Sahni/Shweta Miglani <br />E-mail : opsahni2010@yahoo.com / k_shweta81@yahoo.co.in<br />Contact No. 9915633055 <br />Course description <br />This course is designed for management students and seeks to integrate various principles and concepts from different fields of economics with typical problems of managerial decision-making and policy formulation in business organizations whether in a local or global context.<br />The Three Themes of this Course are<br />• Economic Behavior of Consumers/Customers<br />• Economic Behavior of Producers/Managers<br />• Market and Cost Structures and the Accompanying Dynamics<br />Why Managerial Economics for Managers<br />This Course Seeks to Address the Following Questions<br />• Why do economic problems crop up and how do people organise to address the basic economic problems?<br />• What dictates consumption patterns of consumers? Why do consumers behave the way they do?<br />• Why do companies produce? At what cost does companies produce?What determines the profit levels of companies operating in different market structures?<br />• What relationship/relevance has this course got with business decision making – especially in developing optimal strategies to compete with rivals and co-operate with partners in a competitive environment?<br />• Do you find it useful to apply basic economic reasoning to other related topics in business studies such as marketing, finance and organization.<br /> Course objectives <br />At the end of this course the student will be able to <br />− Use the theory of the firm to model business organizations <br />− Apply demand theory to establish the elasticity of demand <br />− Use demand estimation to forecast demand trends and change <br />− Apply production theory to manage production <br />− Use cost theory to establish short and long run behavior <br />− Describe market structures to establish market equilibrium <br />− Use pricing strategies to enable organizational coherence <br />− Use macroeconomic principles to address market failures <br /> Methodology <br />Class sessions comprise a mixture of lectures, interactive discussions, case studies, case presentations, and problem solving.<br />Assessment<br />Students are assessed in the following manner: <br />Presentations (20 min): case study team presentations set at particular date, students are assessed on their ability to work as team to prepare and present in a meaningful and formal manner the application of economic principles on managerial issues.

2. Attendance: constructive participation and regular presence in all lectures; students are assessed on their ability to commit themselves to studying managerial economics. Code <br />Students are to note the following: <br />− There are no makeup assignments or examinations unless there is a case of a significant illness. <br />− Absences are treated as per College policy. <br />− Conflicts due to professional commitments must be indicated via e-mail prior to the class session <br />S.NO.LecturesTopicsCase StudyAssignment1Introduction (Lecture 1)Introduction to Managerial Economics as a part of PGDM Programme - Its meaning, Utility, what does it includes and how it helps in his/her life 2Introduction to concept Of Economics (Lecture 2-5)Satisfaction of unlimited wants with limited Resources Principles of Economics Micro Economics - Study of one variable at a time Macro Economics- Study of group of Variables 3Application Of Micro and Macro In ME - Subject Matter and contributions of other disciplines like Accounting, HR, Statistics etc in the same, Macro Vs Micro Economics 5Principles Of ME opportunity Cost Principle- The Cost of Sacrificing next best Alternative. Ex - How person selects best Job out of various alternatives Marginal and Incremental Principles - How the costs are being affected by any decision in the business. Ex- college decides to open any new course Looking for perfect business 7Demand Analysis (Lecture 6- 10)Demand Analysis- Meaning Of demand- Quantity demanded at any given time Effective demand- Desire + Willingness to Buy + ability to buy Types Of goods- Categorisation on the basis of types of demand 8Factors affecting Demand Price( Price Effect) - Law of Demand ie Inverse relation between price and Demand 9Other Factors affecting Demand - Income, Price of Related Goods etc 9Elasticity Of Demand- Degree of Responsiveness of demand due to change in any one factor Factors affecting Elasticity - Type of Product, Number of Substitutes 10Types of elasticity- Price Elasticity, Income, Cross and Promotional Elasticity of demand, Relationship between Elasticity and total Revenue 11 Case DiscussionCase Study1- Tanishq 12Demand Forecasting Techniques (Lecture 11-13)Demand Forecasting- Ability to predict demand of various products, Need of Forecast - How does it affect Costs, Revenues Production, Types of Forecast - Active Forecasts, Passive Forecasts 14Market experiment Method - When actual or sample product is tried and tested in market 1. Actual Market, 2. Market simulation Method Assignment115Survey of Consumer Intentions- 1. Census Survey, 2. Sample Survey, 3.Test Marketing 16Statistical Method - 1. Regression, 2. Correlation, 3.Moving Average, 4. Leading Indicator 17Utility Analysis (Lecture 14-15)Indifference Curve analysis- Concept of Utility- Want Satisfying Power of Product, Indifference Curve - Locus of points showing different combinations of two products consumed and yielding same level of satisfaction Properties of Indifference Curve 18 Properties of Indifference curve analysis (contd), Consumer Equilibrium- Best satisfaction level of consumer under Indifference curve analysis 19Production Function (Lecture 16-18) Production Function- Relationship between factors of production and output Short Run- When atleast one factor of production is a variable factor Long Run Production Function - When all the factors are variable factors Law of Variable Proportions- Rate of change in output due to change in proportions of one factor of production, keeping other factor constant 20Long Run Production Function- Application of Law of returns to scale ie rate of change in output when all the factors are variable Iso Quants and Iso Cost Line- locus of combinations of factors of production yielding same level of output and same level of cost respectively 21Cost Function (Lecture 19-23) Introduction to Cost Function- Relationship between production and cost function i.e level of output will decide cost 22Theory of Costs Concept of Cost- Payment made to all the factors of production Types of Costs- 1. Fixed Cost 2. Variable Cost 3. Short Run Cost 4. Long Run CostOutsourcing to India: Way to fast track 23Types of Costs-(Contd.) 5.Average Cost, 6. Marginal Cost, 7. Incremental Cost, 8. Private Cost, 9. Sunk Cost, 10.Externalities 24Short Run Cost Function- Explanation of different cost Curves under Short Run Function 25Long Run Cost Function- Behaviour of cost when all the factors are variable Short Run Vs Log run- Which Function to adopt at what level of output 26Price Function(Lecture 24)Price Function- Function decided by demand and supply forces Moventment of Price- Case where Demand and supply moving in same direction Case Where demand and supply move in opposit Direction Factors affecting Price of Product, 27Types of Pricing Techniques- Cost based Pricing, Marginal Pricing, Penetration Pricing, Price Skimming Strategy Breakeven analysis - Point of No Profit No Loss 28Market Structure (Lecture 25-30)Market Structure Concept of Market - Place where buyers and sellers come together to sell a product, Classification of market on the basis of degree of competition Perfect Competition- characterized by Large number of players selling alike Product Monopolistic Competition- characterized by large number of buyers and sellers selling hetrogenous products eg daily use Products like Toothpaste Oligopoly - Characterized by few big players selling Hetrogenous or homogenous Products eg Automobile Market Monopoly - characterized by one Player selling unique Product 29Perfect Competition- Price and output determination under perfect competition giving rise to Supernormal Profits, Normal Profits, LossesIndian Stock Market- Does it explain Perfect Competition 30Monopoly - Features, Price Discrimination Charging different set of prices for same Product, Degrees - Ist Degree, IInd Degree, IIIrd Degree output Price and output determination under Pure monopoly 31Price and output determination under discriminating monopoly - In two different markets, where in one is perfect competition and other has monopoly Myths under Monopoly markets 32Monopolistic competition- Price and output determination 33Oligopoly Cournot model Price and output is determined under zero Cost Structure Ex Mineral Water, Perfect Collusion model- when cartel is being formed by all players on mutual understanding and agrees to share profits equally 34Kinked Demand Model- when upper part of demand curve is highly elastic and lower portion is highly inelastic give rise to kink in demand curve at its centre and making a price of product a rigid priceIndian Cement industry- Riding the high tide <br />Activity 1<br />Every student has to maintain a news file for Economic News especially and discussion on the same news will be asked for in the class any day and also there will be news viva at the end of Trimester from the same news file.(5% weightage)<br />References<br />G.S Gupta, Managerial Economics, McGraw-Hill<br />Samuelson, Paul A. and William D. Nordhaus. Economics, 18th edition, McGraw-Hill/Irwin, 2005<br />Dominick Salvatore, Managerial Economics, Oxford Education<br />