Mba ZC416 Course Handout

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 SIDDHARTH MISHRA
Course Objectives
No
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 “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
Reference Book(s) & other resources

R1 Truett & Truett, "Managerial Economics", John Wiley & Sons, 8th edition, Singapore, 2004
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 Suma Damodaran, "Managerial Economics", Oxford University Press, 2006
R6 H L Ahuja “Managerial Economics: Analysis of managerial decision making” S. Chand, 9 th
edition, 2017
Learning Outcomes:
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. This 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
3 Indifference Curves Implication examples’ discussion
3 Elasticity of Demand Economics Analysis using MS Excel
4 Bicycle sales analysis Statistical Analysis (MS Excel/ Statistical software)
6 Optimizing Factor Inputs Economics Modeling (MS Excel)
7 Cost analysis Economics Modeling (MS Excel)
7 Profit analysis Linear programming tool (MS Excel)
8 Perfect Competition, Monopoly Case studies & excel
10 Game theory exercises Using case study
Content Structure
1. Module 1: Introduction
1.1. Session 1:
1.1.1. Introduction to Economics, Economic Terminology
1.1.2. What is managerial economics
1.1.3. Basic economic concepts
1.1.4. Ten principles for managers
2. Module 2: Theory of the firm and demand analysis - I

2.1. Session 2:
2.1.1. Theory of the firm: neoclassical and others
2.1.2. How markets operate
2.1.3. TR, AR and MR
2.1.4. Basics of demand, Determinants of demand
3. Module 3: Demand Analysis – II and Elasticities

3.1. Session 3:
3.1.1. Price Elasticity of Demand
3.1.2. Income Elasticity of Demand
3.1.3. Cross Elasticity of Demand
3.1.4. Economic Forecasting
4. Module 4: Economic Forecasting

4.1. Session 4:
4.1.1. Why forecasting
4.1.2. Various forecasting methods
4.1.3. Trend projection and constant growth models
4.1.4. Moving averages and exponential smoothing
5. Module 5: Production Analysis

5.1. Session 5:
5.1.1. The Production Function in the Long Run
5.1.2. Marginal Product of an Input
5.1.3. Isoquants and MRTS
5.1.4. Least Cost Combination of Inputs and Economic Region of Production, Expansion
Path
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
8. Module 8: Perfect Competition and Monopoly

8.1. Session 8:
8.1.1. Perfect Competition: Market Demand and Firm Demand
8.1.2. Monopoly and its setting
8.1.3. The Long run and monopoly
9. Module 9: Monopolistic Competition and Oligopoly

9.1. Session 9:
9.1.1. What is monopolistic competition?
9.1.2. How prices are determined?
9.1.3. How outputs are determined?
9.2. Session 10: Oligopoly Model
9.2.1. Duopoly: Cournot’s Model
9.2.2. Bertrand, Edgeworth and Chamberlain
9.2.3. Oligopoly Market Structure
10. Module 10: Games, Information and Strategy

10.1. Session 11:
10.1.1. Games
10.1.2. Asymmetric Information; Adverse Selection; Moral Hazard; Signalling
10.1.3. Mark Up Pricing
11. Module 11: Pricing and Profit Analysis

11.1. Session 12:
11.1.1. Joint Product Problem
11.1.2. Transfer Product Problem
11.1.3. Price Discrimination
12. Module 12
Perspectives on India
12.1. Session 13:
12.1.1. Macroeconomic perspective
12.1.2. Employment in India & other macroeconomic indicators
12.1.3. Recent important macroeconomic events
Part B: Learning Plan
Academic Term Second Semester 2022-2023

Course Title Managerial Economics
Course No MBA ZC416
Lead Instructor SIDDHARTH MISHRA
Contact Hour 1
Type Content Ref. Topic Title Study/HW Resource Reference
Pre CH 1.1.1 Review Course Handout/ List your Chapter 1 of text book (T1)
expectations from this course Replay appropriate prerecorded
content/video
ME_RL_1.1 & ME_RL_1.2
During 1.1.1, 1.1.2, Introduction to Economics; Chapter 1 of text book (T1)

CH 1.1.3, 1.1.4 Economic Terminology; What is Replay appropriate prerecorded
managerial economics; Basic content/video
economic concepts; Ten principles ME_RL_1.1 & ME_RL_1.2
for managers
Post CH 1.1.1, 1.1.2, Review reference chapters from Chapter 1 of text book (T1)
1.1.3, 1.1.4 textbook; replay videos as needed Replay appropriate prerecorded
to clarify understanding content/video
ME_RL_1.1 & ME_RL_1.2
Contact Hour 2
Pre CH 1.1.1 to 1.1.4 Review – recap previous topics. Refer M2 PPT slides; ME_RL_2.1 &
ME_RL_2.2
During 2.1.1, 2.1.2 Theory of the firm: neoclassical Refer M2 PPT slides; ME_RL_2.1 &
CH and others; How market operate ME_RL_2.2
Post CH 2.1.1, 2.1.2 Review reference chapters from Refer M2 PPT slides; ME_RL_2.1 &
textbook; replay videos as needed ME_RL_2.2
to clarify understanding
Contact Hour 3
Pre CH 1.1.1 to 1.1.4 Review previous week's topics. Replay appropriate prerecorded
content/video
ME_RL_3.01 to ME_RL_3.07
During 2.1.3, 2.1.4 Total Revenue, Average Revenue Chapter 3 of text book (T1)
CH & Marginal Revenue; Basics of Replay appropriate prerecorded
demand Determinants of Demand content/video
Post CH 2.1.3, 2.1.4 Review reference chapters from Chapter 3 of text book (T1)
textbook; replay videos as needed Replay appropriate prerecorded
Contact Hour 4
Pre CH 2.1.1 to 2.1.4 Review – recap previous topics. Chapter 3 of text book (T1)
Replay appropriate prerecorded
content/video
During 3.1.1, 3.1.2 Price Elasticity of Demand, Chapter 4 of text book (T1)
CH Income Elasticity of Demand, Replay appropriate prerecorded
Cross elasticity of Demand content/video
Contact Hour 5
Pre CH 3.1.1 to 3.1.4 Review previous week's topics. Chapter4 of text book (T1)
content/video
ME_RL_4.1
During 4.1.1, 4.1.2 Demand estimation; Why Chapter 5 of text book (T1)
CH forecasting, Various forecasting Replay appropriate prerecorded
methods content/video
ME_RL_4.1
Post CH 4.1.1, 4.1.2 Review reference chapters from Chapter 5of text book (T1)
ME_RL_4.1
Contact Hour 6
content/video
ME_RL_4.1
During 4.1.3, 4.1.4 Trend projection, and constant Chapter 5 of text book (T1)
CH growth models, Moving averages Replay appropriate prerecorded
and exponential smoothing content/video
ME_RL_4.1
ME_RL_4.1
Contact Hour 7
Pre CH 4.1.1 to 4.1.4 Review previous week's topics. Chapter 5 of text book (T1)
content/video
During 5.1.1, 5.1.2 The Production Function in the Chapter 6 of text book (T1)
CH Long Run, Marginal Product of an Replay appropriate prerecorded
Input content/video
Contact Hour 8
content/video
ME_RL_5.3
During 5.1.3 to 5.1.5 Isoquants & Marginal Rate of Appendix 6B, Replay appropriate
CH Technical Substitutions, Least Cost prerecorded content/video
Combination of Inputs &Economic ME_RL_5.3
Region of Production; Expansion
Path
Post CH 5.1.3 to 5.1.5 Review reference chapters from Chapter 5 of text book (T1)
ME_RL_5.3
Contact Hour 9
content/video
ME_RL_6.1
During 6.1.1 Types of Costs Chapter 7 of text book (T1)

CH Replay appropriate prerecorded
content/video
ME_RL_6.1
Post CH 6.1.1 Review reference chapters from Chapter 7 of text book (T1)
ME_RL_6.1
Contact Hour 10
content/video
ME_RL_6.1
During 6.1.2, 6.1.3 Costs in the Long Run and Short Chapter 7 of text book (T1)
CH Run Replay appropriate prerecorded
content/video
ME_RL_6.1
ME_RL_6.1
Contact Hour 11
content/video
ME_RL_7.1
During 7.1.2, 7.1.3 Break even Analysis and Appendix 8B

CH Incremental Profit Analysis Replay appropriate prerecorded
content/video
ME_RL_7.1
Post CH 7.1.2, 7.1.3 Review reference chapters from Replay appropriate prerecorded
textbook; replay videos as needed content/video
to clarify understanding ME_RL_7.1
Contact Hour 12
Pre CH 1.1.1 to 6.1.3 MID REVIEW Go through Slides and Videos so far
During 1.1.1 to 6.1.3 MID REVIEW Go through Slides and Videos so far
CH
Post CH 1.1.1 to 6.1.3 MID REVIEW Go through Slides and Videos so far
Contact Hour 13
Pre CH 7.1.1 to 7.1.3 Review previous week's topics. Replay appropriate prerecorded
content/video
ME_RL_8.1
During 8.1.1, 8.1.2, Perfect Competition; Market Chapter 8 of text book (T1)
CH 8.1.3, 8.1.4 Demand and Firm Demand; Replay appropriate prerecorded
Monopoly and its setting, The content/video
Long Run and monopoly ME_RL_8.1
8.1.3, 8.1.4 textbook; replay videos as needed Replay appropriate prerecorded
ME_RL_8.1
Contact Hour 14
content/video
ME_RL_9.1
During 9.1.1, 9.1.2, What is monopolistic competition ; Chapter 9 of text book (T1)
CH 9.1.3 How prices and outputs are Replay appropriate prerecorded
determined content/video
ME_RL_9.1
9.1.3 textbook; replay videos as needed Replay appropriate prerecorded
ME_RL_9.1
Contact Hour 15
content/video
ME_RL_10.1
During 9.2.1, 9.2.2 Duopoly: Cournot's Model, Replay appropriate prerecorded

CH Bertrand, Edgeworth & content/video
Chamberlain ME_RL_10.1
ME_RL_10.1
Contact Hour 16
content/video
ME_RL_10.2
During 9.2.3 Oligopoly market structure Chapter 9 of text book (T1)

CH Replay appropriate prerecorded
content/video
ME_RL_10.2
ME_RL_10.2
Contact Hour 17
content/video
ME_RL_11.1
During 10.1.1, 10.1.2 Games, Asymmetric Information; Chapter 11 of text book (T1)
CH Adverse Selection; Moral Hazard; Replay appropriate prerecorded
Signaling content/video
ME_RL_11.1
ME_RL_11.1
Contact Hour 18
content/video
ME_RL_11.2 & ME_RL_12.1
During 10.1.3 Special pricing practices, cartel, Chapter 10 of text book (T1)
CH price leadership, revenue Replay appropriate prerecorded
maximization, mark Up Pricing. content/video
ME_RL_11.2 & ME_RL_12.1
ME_RL_11.2 & ME_RL_12.1
Contact Hour 19
Pre CH 10.1.1 to Review previous week's topics. Chapter 10 of text book (T1)
10.1.3 Replay appropriate prerecorded
content/video
ME_RL_12.1 & ME_RL_12.2
During 11.1.1, 11.1.2, Joint Product Problem, Transfer Chapter 10 of text book (T1)
CH 11.1.3, 11.1.4, Product Problem; Price Replay appropriate prerecorded
11.1.5 Discrimination, global examples of content/video
pricing ME_RL_12.1 & ME_RL_12.2
11.1.3, 11.1.4, textbook; replay videos as needed Replay appropriate prerecorded
11.1.5 to clarify understanding content/video
ME_RL_12.1 & ME_RL_12.2
Contact Hour 20
Pre CH 12.1.1 to Review previous week's topics. Notes

12.1.3
During 13.1.1, 13.1.2 Employment in India, Measures of Notes

CH employment and unemployment in
India & other macroeconomic
indicators
Recent important macroeconomic
events
Post CH 13.1.1, 13.1.2 Review reference chapters from Notes

textbook; replay videos as needed
to clarify understanding
Contact Hour 21 & 22
Pre CH 1.1.1 to 13.1.2 FINAL REVIEW Go through ALL Slides and Videos
During CH 1.1.1 to 13.1.2 FINAL REVIEW Go through ALL Slides and Videos
Post CH 1.1.1 to 13.1.2 FINAL REVIEW Go through ALL Slides and Videos
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/ Assignment-I Online - 5% February 13-23, 2023
Quiz-II Online 5% March 20-30, 2023
EC-1
Experiential Learning Online 15%
April 20-30, 2023
Mid-Semester Test EC 2 Open 2 hours 30% Saturday, 11/03/2023 (FN)
EC-2
Book
Comprehensive Exam Open 2½ 45%
EC-3 Saturday, 20/05/2023 (FN)
EC 3 Book hours
Experiential Learning Components for Evaluation**:
Component % Description
weightag
e
Problem Solving 7% Group Assignment on solving problems using XL
Analysis of industry structure taking 8% Group Activity on submitting a 1000 words write-up
an example a given topic and structure (explaining the industry
structure, justifying the same and mentioning its
implications for the industry)
** Copying lead to zero marks – there will be no investigation as to which group has copied from whom, all
groups get zero marks.
An extra chamber consultation hour is planned. Details will be shared soon.
Syllabus for Mid-Semester Test (Open Book): Topics in Contact Nos. 1 TO 12

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 either two Assignments or three 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.

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BIRLA INSTITUTE OF TECHNOLOGY & SCIENCE, PILANI

WORK INTEGRATED LEARNING PROGRAMMES

Reference Book(s) & other resources

Experiential Learning Components:

Module Topic Experiential Learning Component

2. Module 2: Theory of the firm and demand analysis - I

3. Module 3: Demand Analysis – II and Elasticities

4. Module 4: Economic Forecasting

5. Module 5: Production Analysis

6. Module 6: Cost of Production

7. Module 7: Profit and Revenue Maximization

8. Module 8: Perfect Competition and Monopoly

9. Module 9: Monopolistic Competition and Oligopoly

10. Module 10: Games, Information and Strategy

11. Module 11: Pricing and Profit Analysis

Part B: Learning Plan

Academic Term Second Semester 2022-2023

Lead Instructor SIDDHARTH MISHRA

During 1.1.1, 1.1.2, Introduction to Economics; Chapter 1 of text book (T1)

During 6.1.1 Types of Costs Chapter 7 of text book (T1)

Type Content Ref. Topic Title Study/HW Resource Reference

During 7.1.2, 7.1.3 Break even Analysis and Appendix 8B

Type Content Ref. Topic Title Study/HW Resource Reference

During 9.2.1, 9.2.2 Duopoly: Cournot's Model, Replay appropriate prerecorded

During 9.2.3 Oligopoly market structure Chapter 9 of text book (T1)

Pre CH 12.1.1 to Review previous week's topics. Notes

During 13.1.1, 13.1.2 Employment in India, Measures of Notes

Post CH 13.1.1, 13.1.2 Review reference chapters from Notes

Experiential Learning Components for Evaluation**:

An extra chamber consultation hour is planned. Details will be shared soon.

Syllabus for Mid-Semester Test (Open Book): Topics in Contact Nos. 1 TO 12

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