Managerial Economics

COURSE OUTLINE
COURSE CODE:
MBA PROGRAM
SEMESTER – I
YEAR - 1
Instructor: Mrs. Talluri Jhansi

E-mail: jahansi@gmail.com

COURSE DESCRIPTION

Managerial Economics is the application of economic theory and methodology to

managerial decision making problems within various organizational settings such as
a firm or a government agency. The emphasis in this course will be on demand analysis
and estimation, production and cost analysis under different market conditions,
forecasting and decision making under uncertainty. Students taking this course are
expected to have had some exposure to economics and be comfortable with basic algebra.
Some knowledge of calculus would also be helpful although not necessary.

COURSE PURPOSE:

This course seeks to integrate various principles and concepts from different fields of
economics with typical problems of managerial decision making.

COURSE OBJECTIVE

In today's dynamic economic environment, effective managerial decision

making requires timely and efficient use of information. The purpose of this course is to
provide students with a basic understanding of the economic theory and analytical tools
that can be used in decision making problems. At the end of this course students should
be able to :
 1. Apply demand theory to establish elasticity of demand and perform demand forecast.
2. Use game theory to decide on business strategies.
3. Apply production theory to manage production.

DETAILED COURSE DESCRIPTION

Chapter 1 Nature, scope and methods of managerial economics

1.1 Introduction
1.2 Definition and relationships with other disciplines
1.3 Elements of managerial economics 11
1.4 Methods & Scientific theories

Chapter 2 The theory of the firm

2.1 Introduction
2.2 The nature of the firm
2.3 The basic profit-maximizing model
2.4 Measurement of profit
2.5 Risk and uncertainty
2.6 Multiproduct strategies

Chapter 3 DEMAND THEORY ANALYSIS

3.1 Introduction
3.2 Definition and representation
3.3 Consumer theory
3.4 Factors determining demand
3.5 Elasticity

Chapter 4 Demand estimation

4.1 Introduction
4.2 Methods
4.3 Model specification
4.4 Data collection
4.5 Forecasting

Chapter 5 Estimation of Production and Cost Function

5.1 Introduction
5.2 Basic terms and definitions
5.3 The short run
5.4 The long run
5.5 Importance of costs for decision-making
5.6 Short-run cost behaviour
5.7 Long-run cost behaviour
Chapter 6 Game Theory
6.1 Introduction, Nature and scope of game theory
6.2 Static games
6.3 Dynamic games

Chapter 7 Market Structure

7.1 Introduction, Characteristics of markets
7.2 Perfect competition
7.3 Monopoly
7.4 Monopolistic competition
7.5 Oligopoly

Chapter 8 Pricing strategy

8.1 Introduction
8.2 Competitive advantage
8.3 Market positioning, segmentation and targeting
8.4 Price discrimination
8.5 Multiproduct pricing

Chapter 9 Role of Government

Teaching Methodology

1. Lectures

2. Case Analysis

3. Group Discussions

4. Guest Speakers

Instructional Materials

These will include: Tablet, Smart board, LCD projector & Computers, Flipcharts, Televisions,

Videos.
Course Evaluation

CATs / Assignment / Presentation

Final Examination

Grading Policy:

Assignments 20%

Class Presentation 20%

Final Exam 60%

Course Text books

1. Wilkinson.N. (2005), Managerial Economics – A problem Solving Approach, Cambridge

Press (ISBN: 0-521-52625-6).

2. Burton. G. George C. and Stuart. W (2002), Quantitative Methods for Business and

Economics. 2nd Edition, Pearson Education, Essex.

3. Douglas E.J. (1992). Managerial Economics: Analysis and Strategy, New Jersey :

Prentice Hall International

Reference Text Books

1. Craig. P. & Chris. L. (1999). Managerial Economics, 4th Edition, Prentice Hall.

2. Salvatore, D. (2004). Managerial Economics in a Global Economy with Economic

Applications Card, 5th Edition, South-Western (Thompson) ISBN: 0-324-17187-0

3. Hill. S. (1989). Managerial Economics : Analysis of Business Decisions, London,

McMillan.
Course Journals

1. Journal of Economics

2. Journal of Finance and Economics

3. Journal of Economic Research

Reference Journals

1. Journal of Applied Economics

2. Journal of Economic Development

3. Journal of Business Economics