Course Contents

Introduction • Definition and scope of Managerial Economics. Theory of Firm • Functions and objectives of Firm and Industry. • Critical analysis of Firms, objectives of profit maximization. • Boumal’s sales maximization model. Managerial theories of Firm. • Williamson’s theory. • Marris’ theory. Demand analysis • Price elasticity, income elasticity and cross elasticity of demand. • Demand estimation and demand forecasting. o Survey methods. o Market studies and experiments. o Statistical methods. Production and cost analysis • Production function and related projections. • Types of costs. Pricing practice. • Price discrimination. • Full-cost pricing. • Bain’s theory of Limit Pricing. Capital budgeting • Prerequisites of capital budgeting. • Investment decisions. • Supply and cost of capital.

Course Synopsis

1 Provide the students a good understanding of Managerial Economics 2 To explain the relevance of these basic concepts with the business world.

Course Learning Outcomes

After completing the course the students shall be able to • Understand the principles of managerial economics, the mechanism of industries and their objective. • Understand the concepts of demand estimation and demand forecasting, production function and pricing policies. • Describe and interpret the managerial theory of firms.