JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD

Course Objective

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

on business decisions.

Learning 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) *****

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, Break Even Analysis.

UNIT - IV: Market Structures- Pricing and Output decisions

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.

UNIT - V: Pricing Strategies

Pricing Policy, Price Discrimination, Cost Plus Pricing, Pricing of

multiple products, Transfer pricing, Pricing over Product Life Cycle. Theory of Firm - Managerial Theories and Behavioral Theories of firm. International Price Discrimination: Dumping, Effects of Dumping.

Suggested Readings:

• H L Ahuja, Business Economics, S. Chand & Co, 9e, 2017.
• D N Dwivedi, Managerial Economics, Vikas Publications 8e, 2015.
• Chaturvedi, Business Economics, International Book House, 2012.
• Craig H. Petersen, W. Cris Lewis and Sudhir K. Jain, Managerial Economics, Pearson, 14e, 2014.
• Dominick Salvatore, Managerial Economics, Oxford Publications, 7e, 2012.
• Mark Hirschey, Managerial Economics, Thomson, 10e, 2003.