BIRLA INSTITUTE OF TECHNOLOGY & SCIENCE, PILANI

WORK INTEGRATED LEARNING PROGRAMMES

Digital
Part A: Content Design
Course Title Managerial Economics
Course No(s) MBA ZC416
Credit Units 4
Credit Model
Content Authors SIDHARTH MISHRA & Leela Rani

Course Objectives (CO)

CO1 Gain insights into the scientific & analytical methods, techniques and tools of economics

CO2 Gain basic understanding of the underlying concepts and building blocks related to managerial economics

CO3 Understand the application of these concepts in business and economic policy using suitable examples, case
studies, simulation, etc.

Text Book(s)
T1 Truett & Truett, "Managerial Economics" (Indian adaptation), John Wiley & Sons, 8th edition, Singapore, 2021.
ISBN: 9789354640759 (this book will be available for purchase online from Jan end, meanwhile e-copy of few
chapters will be shared).

Reference Book(s) & other resources

R1 Salvatore & Srivastava “Managerial Economics: Principles and worldwide applications”, 7 th edition, Oxford.
R2 Samuelson & Nordhus, "Economics", Tata McGraw-Hill Edition, 16th edition, New Delhi, 1998
R3 Petersen, Lewis and Jain, “Managerial Economics”, Pearson Education, New Delhi, 2006.
R4 Hirschey, “Economics for Managers”, Thompson, New Delhi, 2006
R5 “Managerial Economics: Economics tools for today’s decision makers ”By Paul G. Keat, Philip K.Y. Young,
Stephen E. Erfle and Sreejata Banerjee, Pearson Paperback, 7th edition, 2018

R6 H L Ahuja “Managerial Economics: Analysis of managerial decision making” S. Chand, 9 th edition, 2017

Learning Outcomes (LO):

No Learning Outcomes
LO 1 Examine the nature and scope of managerial economics; Able to understand the economic goals of the
firms and optimal decision-making; Understand the reason for existence of firms and the environment in
which they operate.
LO 2 Analyze the demand and supply conditions and assess the position of a company; Apply the concepts of
price, cross and income elasticity of demand; Able to analyze how elasticity affects revenue
LO 3 Examine various economic forecasting techniques used by managers; Be able to use demand estimation
models to estimate demand equations and apply different forecasting techniques.
LO 4 Analyze production, cost and profit maximization; Able to analyze and interpret various forms of production
function; Establish the linkage between production function and cost function; Able to calculate Break Even
Point (BEP)
LO 5 Understand the Markets and the behavior of the firm; Compare and contrast four basic market types:
perfect competition; monopoly; monopolistic competition; oligopoly; Analyze the variations in price-output
decisions in these market types

Experiential Learning Components:

This course will feature experiential learning components in the form of projects and assignments (Economics modeling,
statistical analysis, case studies, simulations etc.) that are designed to enable the participants to learn by doing. Few will
also form part of the Evaluation Components for the course. Please note that experiential learning components are
integrated into the following modules:

Module Topic Experiential Learning Component

1 Firm theory – NPV Excel modelling
2 Indifference Curves Implication examples’ discussion
3 Elasticity of demand Economics Analysis using MS Excel
4 Demand estimation & forecasting Bicycle sales analysis using MS Excel
5 Optimizing Factor Inputs Economics Modeling (MS Excel)
6 Cost analysis Economics Modeling (MS Excel)
7 Profit analysis Economics Modeling (MS Excel)
8 Perfect Competition, Monopoly Case studies & excel
10 Game theory exercises Using matrices & case study

Content Structure

1. Module 1: Introduction to Economics, Economic Terminology

1.1. Session 1:
1.1.1. What is managerial economics
1.1.2. Basic economic concepts & ‘principles for managers’
1.1.3. Process of decision making
1.1.4. Objectives of managers (Theory of the firm: neoclassical and others)
1.1.5. Sustainability in decision-making

2. Module 2: Revenue of the firm

2.1. Session 2:
2.1.1. Demand and revenue: TR, AR and MR
2.1.2. Determinants of demand & supply
2.1.3. Elasticity of demand
2.1.4. Consumer behavior: utility & budget constraint

3. Module 3: Demand Analysis & estimation

3.1. Session 3:
3.1.1. Tools for demand estimation
3.1.2. Demand estimation using regression analysis
3.1.3. Regression vs. Correlation
3.1.4. Assumptions and problems in regression analysis

4. Module 4: Economic Forecasting

4.1. Session 4:
4.1.1. Types of economic forecasting
4.1.2. Factors affecting economic variables
4.1.3. Forecasting methods: time series, smoothing, barometric and surveys
4.1.4. Forecasting accuracy

5. Module 5: Production Analysis

5.1. Session 5:
5.1.1. Circular flow in economy
5.1.2. Production function in the long run
5.1.3. Marginal product of an input
5.1.4. Isoquants and MRTS
5.1.5. Least Cost combination of Inputs
5.1.6. Economic region of production, expansion path
5.1.7. Production function in the short un

6. Module 6: Cost of Production

6.1. Session 6:
6.1.1. Types of Costs
6.1.2. Costs in the Long Run
6.1.3. Costs in the Short Run

7. Module 7: Profit and Revenue Maximization

7.1. Session 7:
 7.1.1. Profit Maximization
7.1.2. Break Even Analysis
7.1.3. Incremental Profit Analysis
7.1.4. Producer’s surplus

8. Module 8: Perfect Competition and Monopoly

8.1. Session 8:
8.1.1. Perfect Competition: Market Demand and Firm Demand
8.1.2. Commoditization of brands
8.1.3. Monopoly and its setting
8.1.4. Monopoly failures & losses
8.1.5. The Long run and monopoly

9. Module 9: Monopolistic Competition and Oligopoly

9.1. Session 9:
9.1.1. Monopolistic competition basics
9.1.2. Prices & output determination in short and long run
9.1.3. Selling expenses for monopolistic firms
9.1.4. Duopoly: Cournot’s Model

9.2. Session 10: Other oligopoly concepts

9.2.1. Bertrand, Edgeworth and Chamberlain
9.2.2. Oligopoly Market Structure
9.2.3. Tacit collusion & price leadership
9.2.4. Perfect collusion
9.2.5. Production with multiple plants

10. Module 10: Games, Information and Strategy

10.1. Session 11:
10.1.1. Games & strategy: basic types
10.1.2. Multiple equilibria, sequencing, first-mover advantage
10.1.3. Co-operative & repeated games
10.1.4. Trees and sequential games
10.1.5. Asymmetric information, adverse selection, moral Hazard, signaling

11. Module 11: Pricing and Profit Analysis

11.1. Session 12:
11.1.1. Mark Up Pricing
11.1.2. Joint Product Problem
11.1.3. Transfer Product Problem
11.1.4. Price Discrimination
11.1.5. Two part pricing
11.1.6. Bundling

12. Module 12: Macroeconomic perspectives for India

12.1. Session 13:
12.1.1. Macroeconomic settings
12.1.2. Inflation, production and employment
12.1.3. Income and its equality
12.1.4. International trade and BoP
12.1.5. Political influence on economy and industry

Evaluation Scheme: Pl see Next page.

Evaluation Scheme:
Legend: EC = Evaluation Component; AN = After Noon Session; FN = Fore Noon Session

No -% Name Type Duration Weight Day, Date, Session, Time

Quiz-I Online - 10% Online (date will be announced)
Quiz-II Online 10%
Online (date will be announced)
EC-1- 25
Experiential Learning Online 5%
Group activity
Mid-Semester Test EC Closed 2 hours 30%
EC-2- 30
2 Book
Comprehensive Exam Open Book 3 hours 45%
EC-3 -45
EC 3

Syllabus for Mid-Semester Test (Closed Book): Topics in Contact Nos. ……….
Syllabus for Comprehensive Exam (Open Book): All topics
Important links and information:
Elearn portal: https://elearn.bits-pilani.ac.in
Students are expected to visit the Elearn portal on a regular basis and stay up to date with the latest announcements
and deadlines.
Contact sessions: Students should attend the online lectures as per the schedule provided on the Elearn portal.
Evaluation Guidelines:
1. EC-1 consists of one Assignments or two quizzes. Students will attempt them through the course pages on the
Elearn portal. Announcements will be made on the portal, in a timely manner.
2. For Closed Book tests: No books or reference material of any kind will be permitted.
3. For Open Book exams: Use of books and any printed / written reference material (filed or bound) is permitted.
However, loose sheets of paper will not be allowed. Use of calculators is permitted in all exams.
Laptops/Mobiles of any kind are not allowed. Exchange of any material is not allowed.
4. If a student is unable to appear for the Regular Test/Exam due to genuine exigencies, the student should
follow the procedure to apply for the Make-Up Test/Exam which will be made available on the Elearn portal.
The Make-Up Test/Exam will be conducted only at selected exam centres on the dates to be announced later.
It shall be the responsibility of the individual student to be regular in maintaining the self study schedule as given in the
course handout, attend the online lectures, and take all the prescribed evaluation components such as
Assignment/Quiz, Mid-Semester Test and Comprehensive Exam according to the evaluation scheme provided in the
handout.