JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD

Course Objective

To understand the Business, impact of Micro and Macro Economic Environment

on business decisions.

Course Outcome

Students will be able to understand (a) Economic Principles in Business (b)

Forecast Demand and Supply (c) Production and Cost Estimates (d) Market Structure and Pricing Practices (e) Economic Policies.

UNIT - I

Introduction to Business Economics: Definition, Nature and Scope, Relationship with other disciplines – business decision making process- The role of managerial economist- Basic economic principles – the concept of opportunity cost, Marginalism, Equi-marginalism, incremental concept, Time perspective, discounting principle, risk and uncertainty.

UNIT - II

Theory of Demand and Supply: Demand Analysis - demand function, law of demand, determinants of demand, types of demand. Elasticity of demand, types, Measurement and significance of Elasticity of Demand. Demand Forecasting, Need for Demand Forecasting, Methods of Demand Forecasting. Supply – Supply function, determinants of supply, law of supply, Elasticity of Supply.

UNIT - III

Production and Cost Analysis: Production function, Production function with one, two variables, Cobb-Douglas Production Function, Marginal Rate of Technical Substitution, Isoquants and Isocosts, Returns to Scale, Economies of scale - Innovations and global competitiveness. Cost concepts, determinants of cost, cost-output relationship in the short run and long run, short run vs. long run costs, average cost curves.

UNIT - IV

Market Structure and Pricing Practices: Classification of Market Structures - Features - competitive situations - Price-Output determination under Perfect competition, Monopoly, Monopolistic competition and Oligopoly - both the long run and short run. Pricing Practices- Price Discrimination- Pricing Strategies- Pricing Over Product Life Cycle- Break Even Analysis.

UNIT - V

Introduction to Business Environment: Macro Economic Analysis (PESTEL MODEL); Industrial Policy of 1991 and recent developments, Fiscal Policy, Monetary Policy, Export - Import Policy, Foreign Direct Investment in India.

TEXTBOOKS:

• 1. H L Ahuja, Business Economics, S. Chand & Co, 13e, 2016.
• 2. Chaturvedi, Business Economics, International Book House, 2012.
• 3. Craig H. Petersen, W. Cris Lewis and Sudhir K. Jain, Managerial Economics, Pearson, 14e, 2014.
• 4. Dominick Salvatore, Managerial Economics, Oxford Publications, 7e, 2012.
• 5. Justin Paul, Business Environment, Tata McGraw Hill, 2010.
• 6. Francis Cherunilam, Business Environment Text & Cases, Himalaya Publications, 2012.