JAWAHARLAL NEHRU TECHNOLOGICAL UNIVERSITY HYDERABAD

Course Objectives:

• To provide an understanding of the basic concepts associated with Business Economics.
• To impart the knowledge of various aspects of Demand and Supply
• To highlight the importance of Production and Cost concepts in a Firm.
• To elaborate on the nature of various Market Structures.
• To enable the understanding of various Pricing Strategies

Course Outcomes

Students will be able to

• Understand the Concepts and Principles of Business Economics.
• Learn various concepts and practical applications of Demand and Supply viz. Laws, Types, Elasticity, Forecasting and Equilibrium.
• Learn concepts and applications related to Production and Cost of a firm.
• Learn the features of various Market Structures along with the Decision-making with regards to Price and Output in Short and Long Terms.
• Understand the concepts of Pricing Practices, Theory of Firm and Managerial & Behavioral Theories of a Firm

UNIT - I: Introduction to Business Economics

Definition, Nature and Scope, Relationship with Other

Disciplines, Business Decision-making Process, 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

(a) Demand Analysis: Demand, 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. (b) Supply, Supply Function, Determinants of Supply, Law of Supply, Elasticity of Supply. (c) Market Equilibrium.

UNIT - III: Production and Cost Analysis

Production Function, Production Function with One and 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 and Competitive Situations. Price-Output Determination under Perfect Competition, Monopoly, Monopolistic Competition and Oligopoly – both the Long-run and the 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:

• D.M. Mithani, Managerial Economics, Himalaya Publishing House, 9e, 2022.
• Satya P. Das & J.K. Goyal, Managerial Economics, Sage Publications, 2e, 2022.
• Dominick Salvatore, Siddhartha K. Rastogi, Managerial Economics, Oxford Publications, 9e, 2020.
• H L Ahuja, Business Economics, S. Chand & Co, 13e, 2019.
• Geetika, Piyali Ghosh, Purba Roy Choudhury, Managerial Economics, Tata McGraw-Hill, 3e, 2018.
• H L Ahuja, Business Economics, S. Chand & Co, 13e, 2019.
• Suma Damodaran, Managerial Economics, Oxford Publications, 2e, 2018.
• P. N. Chopra, Managerial Economics, Kalyani Publishers,1e,2018.  4 MBA SEMESTER – I