ECONOMICS FOR MANAGERIAL DECISION MAKING-1 (ECONOMIC ANALYSIS SIMPLIFIED FOR YOU) 1.
ESSENCE OF ECONOMICS Problems of an economy; solutions of these problems; alternative system to tackle the problems; economics, micro – economics & macro – economics; basis building blocks of microeconomics – rationality, marginalism, opportunity cost, general & partial equilibrium. 2. FALLACIES AND PITFALLS Economics is about decision making, fallacies in decision making, fallacy of assumption, fallacy of composition, fallacy of subjectivity, fallacy of post hoc proctor hoc, fallacy of syllogism, fallacy of black & white or gray; fallacy of broken window, lessons for firm. 3. DEMAND ANALYSIS AND CONSUMER BEHAVIOUR 3.1DEMAND ANALYSIS Concept of demand & demand functions; demand schedule & demand curve; types of demand; kinds of demand; factors influencing demand; expansion / contraction of demand vs. increase / decrease in demand, significance of demand analysis for the firm. 3.2 ELASTICITY OF DEMAND Concept of elasticity, price elasticity of demand; meaning, values, determinants, measurement & implications; slope vs. elasticity; TR, TE & eDP, AR, MR & eDP, strategies to maximize total revenues, cross elasticity of demand; income elasticity of demand: meaning values & measurement; income elasticity vs. income sensitivity; advertising elasticity of demand; significance of the concept of elasticity of demand for the firm. 3.3 UTILITY ANALYSIS Consumer behaviour, choice & utility; concept of TU, MU & AU; LDMU; LEMU; equilibrium of a consumer; explanation of falling demand; income, substitution, & price effects & consumer choices; paradox of value; consumer surplus; significance for a seller. 3.4 INDIFFERENCE CURVE ANALYSIS Meaning; kinds; properties; inference map; budget line; equilibrium; applications of ICA. 4. SUPPLY ANALYSIS & PRICE FORMATION 4.1 SUPPLY ANALYSIS Concept; types; factors dictating supply; supply curve & supply schedule; law of supply; expansion / contraction of supply vs. increase / decrease in supply
. MONOPOLISTIC COMPETITION Meaning and characteristics. ELASTICITY OF SUPPLY Concept. PERFECT COMPETITION Meaning and characteristics. expansion path. break – even analysis and shut down point. price as allocating device for resources through surplus & scarcities. advantages of perfect competition. concept of Isoquant.2. linkage between production & cost. SR equilibrium.4.3 EQUILIBRIUM AND PRICE MAKING Concept of equilibrium. MP. rising or falling) and short run. efficiency of competitive markets. revenue and equilibrium under monopoly. TC. cost curve under SR & LR. MONOPOLY Concepts. values. engineering cost curves. existence of small firms. • Concept of cost. 5. LVP. implications for a firm. source of monopoly power. determinants. REVENUE CURVES AND FIRM’S EQUILIBRIUM Concepts of TR. Price discrimination: meaning. equilibrium under cost constraint & for a given output. equilibrium Monopsony Bilateral monopoly 9. long run equilibrium. implications for the suppliers 4. promotional costs and equilibrium. shifts in demand & supply & impact on price & quantity. impact of technological change on return. isocost lines & equilibrium. supply curve of a monopolist. sources of differentiation. 6. cost. equilibrium of a firm in short run and in long run. Economies of scale. cost. supply curve for a competitive firm – LR (horizontal. measurement. LR & VR. AR and MR. economic region of production. measure of monopoly power. AC. monopoly vs. perfect competition. & MC and their relationship. conditions. 8. disadvantages of a competitive firm. 7. types. PRODUCTION AND COST ANALYSIS • Concept of production & production function. revenue and equilibrium of a firm. advantages and disadvantages of monopoly. alternative nodes of price fixation. stages of production. equilibrium under alternative assumptions about firm’s objective functions. cost classification. relationship between TP. concept of returns to scale & laws of returns. and AP. economies of scope. shifts in demand and impact on monopoly firm. 10.
cartels. characteristics. kinked demand curve model.
IMPORTANT NOTE The treatment of the subject shall be non mathematical Emphasis. will be on application of economics principle to the behaviour of the players in Indian Market. while teaching.
• Prasoon Majumder: Economic Analysis Simplified for You (IIPM/Vikas:2010): All chapters
. Cournot’s model.Meaning. price leadership model. game theory treatment of oligopoly.