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COURSE TITLE: ECONOMICS FOR MANAGERIAL DECISIONS

COURSE DURATION: 2 hour per week for 10 weeks

COURSE CREDITS: 2

INDICATIVE LIST OF TOPICS

Lecture 1: INTRODUCTION

• Economics And Managerial Decision Making

o Managerial decision making under perfect information, risky and uncertain
situations.
o Economics: Scope of economics; economics as a tool for decision making.
o Managerial Economics: Definition and scope; distinction between economics and
managerial eco.

Lecture 2-3: CONSUMER DECISION MAKING

• Demand Side Of The Market

o Factors influencing demand; managerial implications.
o Demand elasticitics and lessons for a manager.
o Demand estimation and fore casting: Basic methods.

• Logic Of Buying And Consumption

o Conventional explanation for consumer behavior: Review
o Attributes approach for explaining consumer choices

Lecture 4-5: ECONOMICS OF SUPPLY AND PRODUCTION

• Supply Side Of The Market

o Factors determining after of a supplier.
o Supply elasticities and lessons for a manager.

• Production: Conceptual Framework

o Production concepts: review

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o Cost concepts; their role in decision making; incrementation; engineering cost

curves.
o Economies and diseconomies in production and supply.

Lecture 6 - 9: PRICING DECISIONS AND IMPLEMENTATION

• Alternative Paradigms Of Decision Making By A Firm

o The neoclassical model of firm: revenue, equilibrium, and profit positions.
o Boumols’s sales revenue maximization model.
o Behavioral approach of Cyert and March.
o Marris’ model of managerial enterprise.

• Various Market Models And Market Power

o Market classification based on number of players and extent of competition;
contestable markets.
o Power of the marketer regarding price setting in each of the situations.

• Pricing Decisions And Implementations-1: Price Determination

o Pricing decisions when competitors would not react.
o Pricing under mutual dependence conditions
o Pricing for attaining long term objectives.

• Pricing Decisions And Implementation-2: Specific Models Of Pricing

o Situation of multiplant operations
o Cartelization
o Price discrimination
o Transfer pricing

• Pricing Decisions And Implementation-3: Decisions In Practice

o Pricing under uncertainty.
o Rule of thumb pricing.
o Mark up pricing.
o Product line pricing.
o Price as quality indicator.
o Pricing of product bundles

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o Promotional pricing.

• Pricing Decisions And Implementation-4: New Product Pricing

o Setting the initial price.
o Adjusting price overtime

Lecture 10: PRICING IN A REGULATORY FRAMEWORK

• Market Failures And Price Regulations

o Market failures and need for regulation.
o Regulations and market structure, firm behavior etc.
o Price regulations.

BASIC TEXTS:
LILA. J Truett E- Dale B. Truett: Managerial Economics (john Wiley and sons)
IVON PING: Managerial Economics (Blackwell Publishers)
D N SENGUPTA AND ANINDYA SEN: Economics of Business policy (OUP)

Department of Academics, IIPM New Delhi