Economics For Business Decisions MCOM Semester I

Economics For Business Decisions MCOM Semester I


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Economics For Business Decisions

MCOM Part I Semester I


1. Basic Principles in Business Economics (15 Lec.)

l Meaning and Scope of Business Economics - twin principles of  scarcity and efficiency; incremental and Marginal principle; profit maximisation principle; market economy and invisible hand; production possibility frontier; Opportunity cost - accounting profit and economic profit; market failure, externality, public goods and economic role of Government

2. Demand and Supply Analysis (15 Lec.)

l Determinants of demand - market demand function - theory of attributes, snob appeal, band wagon and Veblen effect and demand function. Law of supply - elasticity of supply

l Applications of elasticity of demand and supply to economic issues: Paradox of bumper harvest- tax on price and quantity - minimum floor and maximum ceilings: minimum wages controversy and Administered price control

l The theory of consumer choice - Consumer preference and budget constraint - equilibrium position of tangency  with the help of Indifference curve analysis - effect of changes in price and income on consumer equilibrium

3 Production Decisions and Cost Analysis (15 Lec.)

l Production function - short run and long run - Law of variable proportion, returns to scale, scale economies, scope economies- least cost factor combination for a given output- Expansion path and Multiproduct firm- cost reduction through experience - learning curve

l Economic analysis of Cost : Classification of costs, short run and long run cost functions

4. Market Structure Analysis (15 Lec.)

l Difference between perfectly and imperfectly competitive markets - Perfect competition and Monopoly as limiting cases of market imperfections - Sources of market power - profit maximisation of simple and discriminating monopolist - methods of measuring monopoly power - Public policy towards monopoly power

l Different forms of imperfect competition - Monopolistic competition and Oligopoly - Strategic decision making in oligopoly markets- collusive and non-collusive oligopoly- colliding oligopoly : rivalry among few, price war and kinked demand curve - collusive oligopoly models of price leadership and cartel -  basic concepts of game theory - Using Game theory to analyse strategic decisions - application of model of prisoner’s dilemma  in market decisions

Additional Information

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ISBN-13 978-81-947859-9-6
AUTHOR Dr. P. A. Johnson, A. D. Mascarenhas
YEAR 2020
ED Fifth
SUBJECT Economics For Business Decisions MCOM Semester I
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