Course Contents

1. The Fundamentals of Managerial Economics: The Economics of effective management, Understanding incentives, understanding markets: consumer –producer rivalry, consumer-consumer rivalry, producer-producer rivalry, government and the market, recognizing the time value of money, using marginal analysis. 2. Market Forces: Demand and Supply Demand shifters, the demand function, consumer surplus, supply shifters, the supply function, producer surplus, market equilibrium, price restrictions and market equilibrium, comparative statistics. 3. Quantitative Demand Analysis: Elasticity’s of demand, Cross-price Elasticity, Income Elasticity, and other Elasticity’s, obtaining elasticity’s from demand functions, regression analysis. 4. The Theory of Individual Behavior: Consumer Behavior: constraints: the budget constraint, changes in income, changes in prices, consumer equilibrium, applications of indifference curve analysis, and the relationship between indifference curve analysis and demand curves. 5. The Production Process and Costs: The Production function, the role of manager in the production process, long run decisions, Isoquants, Isocosts, cost minimization, optimal input substitution. 6. The cost Function: Short run costs, Average and marginal costs, relations among costs, fixed and sunk costs, algebraic forms of cost functions, long run costs, economies of scale, economic costs versus accounting costs, multiple-output cost functions. 7. The Organization of the firm: Methods of procuring inputs, transaction costs, types of specialized investments, optimal input procurement. 8. The nature of Industry: Market structure, firm size, industry concentration, measures of industry concentration. 9. Managing in Competitive, Monopolistic, and Monopolistically Competitive Markets: Perfect competition, Monopoly, Monopolistic competition, Basic oligopoly models, Game theory- inside oligopoly, comparing oligopoly models. 10. Pricing Strategies for Firms’ with Market Power

Course Synopsis

The objective of this course is to extend the students understanding of neo-classical microeconomics and to help them think and reason within this framework to solve real world problems. The goal of this course is to analyze Macroeconomics from a firm-centric perspective. It is geared to help students draw the connection between policy made at the Macro-level and its direct and indirect effect on the decision-making of the manager of a firm/business.

Course Learning Outcomes

By the end of this course students should be able to: • Assess the value of managerial theory and concepts in the context of contemporary examples of business and public sector organizations. • Understand the main theories of the objectives of firms, the importance of these objectives for decision making and the factors likely to determine the objectives followed by different firms. • Critically evaluate theories of the product, pricing and promotional decisions of firms using relevant empirical analysis. • Judge the merits of economic analysis with respect to its utility in appraising firm/organization performances