Indian Institute of Management Rohtak

Course Outline

Course Title : Economic Analysis and Business Decision Making

Credits : 1
Type : Compulsory
Session Duration : 75 minutes
Term : I
Year : 2022

Name of Faculty Office e-mail Consultation Time for

students

Dr. Abhay Pant 108 abhay.pant@iimrohtak.ac.in By Appointment

Dr. Shweta Bahl 14 shweta.bahl@iimrohtak.ac.in By Appointment

Dr. Rima Mondal 203 rima.mondal@iimrohtak.ac.in Time – 3:00 PM

Days – Monday and

Friday

__________________________________________________________________

Introduction

A basic understanding of the concepts and tools of economic analysis is essential for
anyone who aspires to be a professional manager. Economic Analysis and Business
Decision Making will teach participants the rationality of economic decision making
concerning households, business firms, markets, factors of production and so on. The
course serves as the basis for understanding consumer behavior, producer behavior and
their interaction in markets, and is useful in promoting an understanding of the powerful
tools of decision making by firms that help to solve business and other problems.

Course Objectives
The specific objectives of the course are:
1. To familiarize the students with basic economic concepts
2. To understand the application of economic principles in managerial decisions

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 3. To sharpen the analytical skills of students by assimilating the knowledge of
economic concepts with decision making techniques
4. To gain a deeper understanding of the behaviour of consumers and firms by using
the economic tools and techniques

Pedagogy
The pedagogy would be a mix of Lectures, Discussion, Cases/examples, Quiz and term
exams.

Evaluation Scheme
Quiz 10%
Class Preparedness* 10%
Project (&/Presentations) 20%
Mid Term Exam 30%
Final Exam 30%

*For class participation and preparedness coherent discussions will be considered.

Brief Outline
The main modules of the course are:
1. Theory of Consumer Behaviour
2. Theory of Production
3. Theory of Costs
4. Market Structure: Competitive & Non-competitive markets

References
1. Text Book: Managerial Economics: Concepts and Applications by Christopher R
Thomas and S Charles Maurice, 10th Edition, 2014, The McGraw-Hill Companies.

2. Other Readings (To be arranged by students): Dominick Salvatore, Principles of

Microeconomics, 5th Edition (International Version), 2014, OXFORD University Press.

Special Instructions
Please read and prepare well in advance for case presentation & discussion in the class.
Case/reading for each session is indicated in the Session Plan. The sessions will be of 75
minutes duration. R indicates additional readings. C indicates cases.

Session Plan

Session Topic and Sub-topics Reference Case /

No. (Book chapter / Readings
Page numbers
from the book)

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1-2 Introduction of Economics: Chapter 1 C1, C2
Concepts and utility of the
subject for managers.
3-4 Consumer Utility Analysis & Chapter 2, 5 & 6 C3, C4
Theory of Demand

5-6 Elasticity of demand Chapter 3, 4 & 6 C5, C6

Applications and Numericals of
the theory of Consumer
Behaviour

7 Time element in the theory of Chapter 4 & 7 C7

price & elasticities
Estimation of demand
8-9 Theory of Production: Chapter 3 & 8 C8, C9
Short & Long Run
Managerial use of Production
function.
Optimization
10-11 Theory of costs Chapter 8 & 9 C10, C11, C12
Economies & diseconomies of
scale
Empirical evidence of the
behavior of costs

12-13 Markets: Perfect competition. Chapter 11 C13, C14

Application & numericals
14-15 Imperfect competitions – Chapter 12 & 13 C15, C16
Monopoly, monopolistic
competition
16 Price discrimination under Chapter 14 C17
monopoly, Dumping
17 Oligopoly Chapter 13 C18
Cournot & Bertrand solutions.
18-19 Stackelberg & market sharing Chapter 11: C 19, C20
model Dominick
Sweezy’s Kinked demand curve Salvatore,
model Principles of
Microeconomics,
5th Edition
(International
Version), OUP,
2014
20 Review/Presentations

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 Table of Contents

Sl. Case Case Title Session

No. No. No.

1 C1 Consumer Preference for Rice. Authors: George, P S; IIMA 1-2

Cases, Reference No: CMA0253

2 C2 NICM Cultural Committee. Authors: Joshi, N U; IIMA Cases, 1-2

Reference No: ECO0160

3 C3 A case study of the supply and demand for morning 3&4

kindergarten by Nancy Ruth Fox

4 C4 Fee Regulation in Private Schooling: The Case of Gujarat 3&4

Authors: Bansal, Vertika; Jain, Tarun; Kumar, Shivam; Sarda,
Priyanka; IIMA Cases, Reference No: ECO0366EX

5 C5 Elasticities of Demand for food in India published in IIM A 5&6

Case Centre by Ravindra H Dholakia. Reference No
ECO0361.

6 C6 Demand Elasticities for Pulses and Public Policy Options 5&6

published in IIM A Case Centre by Ravindra H Dholakia.
Reference No ECO0362

7 C7 Price elasticity for clothing increases with time_example 5-2, 7

Salvatore 2014, Micro, P.124-125.

8 C8 Amita Tea. Author: Balakrishnan, K; IIMA Cases. Reference 8&9

No.: F&A0300

9 C9 Spark Publishing and Printing House: Short-run Managerial 8&9

Decisions Raises a “Hamlet-Like” Dilemma; IIMA Cases.
Reference No.: F&A0516

10 C10 SpaceX, Economies of Scale, and a Revolution in Space 10 & 11

Access. By: Matthew C. Weinzierl, Kylie Lucas and Mehak
Sarang

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11 C11 Output elasticity of labour and capital and returns to scale in 10 & 11
US and Canadian manufacturing_Salvatore_micro_2014 fifth
edition_p. 208-209.

12 C12 Long run Average cost curve in Electricity Generation, 10 & 11

Salvatore (2014)_micro_p. 227-228.

13 C13 EBay: Towards A Perfectly Competitive Market. December 12 & 13

2010. International Journal of Economics and Business
Research 9(3):65-70. DOI: 10.19030/iber.v9i3.536.

14 C14 Competition in the New York stock market_Salvatore_micro 12 & 13

_2014_P. 246-247.

15 C15 Are Public Sector Monopolies Benign: The case of coal India 14 & 15
limited published in IIM A Case Centre by Ravindra H
Dholakia and Diptiranjan Mahapatra

16 C16 Managing natural monopolies: interplay of the regulator and 14 & 15

telecom companies in India. By Rima Mondal and Nivisha
Singh

17 C17 Ready-to-Eat Breakfast Cereal Industry: Coupon Competition 16

and Price Discrimination. By: Peter J. Coughlan

18 C18 Is It Time To Break Up Amazon, Apple, Facebook, or 17

Google? by James Heskett

19 C19 The Organisation of Petroleum Exporting Countries (OPEC) 18 & 19

Cartel_Salvatore 2014, P. 339.

20 C20 Something is rigid in Denmark_Petersen & 18 & 19

Lewis_ME_1999_P. 350.