Business cconomics – Part I –Revised FYBMS Syllabus 2016

Modules at a Glance

 

Sr. No. Modules No. of Lectures
1 Introduction 10
2 Demand Analysis 10
3 Supply and Production Decisions and Cost of Production 15
4 Market structure: Perfect competition and Monopoly and Pricing and Output Decisions under Imperfect Competition 15
5 Pricing Practices 10
Total 60

Business Economics – Part I –  Syllabus Overview

Sr. No. Modules / Units
1 Introduction
Scope and Importance of Business Economics – basic tools- Opportunity Cost principle- Incremental and Marginal Concepts. Basic economic relations – functional relations: equations- Total, Average and Marginal relations- use of Marginal analysis in decision making,

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The basics of  market demand, market supply and equilibrium price-  shifts in the demand and supply curves and equilibrium

2 Demand Analysis
Demand Function – nature of demand curve under different markets

Meaning, significance, types  and measurement of elasticity of demand (Price, income cross and promotional)- relationship between elasticity of demand and revenue concepts

Demand estimation and forecasting: Meaning and significance – methods of demand estimation : survey and statistical methods

(numerical illustrations on trend analysis and simple linear regression)

3 Supply and Production Decisions and Cost of Production
Production function: short run analysis with Law of Variable Proportions- Production function with two variable inputs- isoquants, ridge lines and least cost combination of inputs- Long run production function and Laws of Returns to Scale – expansion path – Economies and diseconomies  of Scale.

Cost concepts: Accounting cost and economic cost, implicit and explicit cost, fixed and variable cost – total, average and marginal cost – Cost Output Relationship in the Short Run and Long Run (hypothetical numerical problems to be discussed),

LAC and Learning curve – Break even analysis (with business applications)

4 Market structure: Perfect competition and Monopoly and Pricing and Output Decisions under Imperfect Competition
Short run and long run equilibrium of a competitive firm and of industry – monopoly – short run and long- run equilibrium of a firm under Monopoly

Monopolistic competition:Equilibrium of a firm under monopolistic competition,   debate over role of advertising

(topics to be taught using case studies from real life examples)

Oligopolistic markets: key attributes of oligopoly – Collusive and non collusive oligopoly market – Price rigidity – Cartels and price leadership models  

(with practical examples)

5 Pricing Practices
Cost oriented pricing methods: cost – plus (full cost) pricing, marginal cost pricing, Mark up pricing, discriminating pricing, multiple – product pricing – transfer pricing

(case studies on how pricing methods are used in business world)

 

Reference Books for Business Economics – Paper I
  • Mehta, P.L.: Managerial Economics – Analysis, Problem and Cases (S. Chand & Sons, N. Delhi, 2000)
  • Hirchey .M., Managerial Economics,  Thomson South western (2003)  
  • Salvatore, D.: Managerial Economics in a global economy (Thomson South Western Singapore, 2001)
  • Frank Robert.H, Bernanke. Ben S., Principles of Economics (Tata McGraw Hill (ed.3)
  • Gregory Mankiw., Principles of Economics, Thomson South western (2002 reprint)
  • Samuelson &Nordhas.: Economics (Tata McGraw Hills, New Delhi, 2002)
  • Pal Sumitra, Managerial Economics cases and concepts (Macmillan, New Delhi,2004)

 

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