BALAJI INSTITUTE OF 
                    I.T AND MANAGEMENT 
                                                       KADAPA 
                                   MANAGERIAL ECONOMICS 
                                                          (17E00103) 
                                                ICET CODE: BIMK 
                                                               FIRST INTERNAL 
                                         ALSO DOWLOAD AT http://www.bimkadapa.in/materials.html 
                
                
                
                
                
                   Name of the Faculty: S. GHOUSE 
                                          st     nd                      rd 
                   Units covered:1           , 2     & half of 3 Units 
        MANAGERIAL ECONOMICS          ICET-BIMK       SUBJECT CODE: 17E00103 
                                               
                              (17E00103) MANAGERIAL ECONOMICS 
     
             Objective of this course is to understand the relevance of economics in business management. This 
        will  enable  the  students  to  study  functional  areas  of  management  such as Marketing , Production and 
        Costing from a broader perspective. 
        1.  Introduction to Managerial Economics: Definition, Nature and Scope, Relationship with other areas 
          in Economics, Production Management, Marketing, Finance and Personnel, Operations research - The 
          role of managerial economist. Objectives of the firm: Managerial theories of firm, Behavioral theories of 
          firm, optimization techniques, new management tools of optimization. 
        2.  Theory of Demand: Demand Analysis – Law of Demand - Elasticity of demand, types and significance 
          of Elasticity of Demand. Demand estimation – Marketing research approaches to demand estimation. 
          Need for forecasting, forecasting techniques. 
        3.  Production Analysis: Production function, Isoquants and Isocosts, Production function with one/two 
          variables, Cobb-Douglas Production Function, Returns to Scale and Returns to Factors, Economies of 
          scale- Cost concepts - cost-output relationship in the short run and long run, Average cost curves - Break 
          Even Analysis. 
        4.  Market Structure and Pricing practices: Features and Types of different competitive situations - 
          Price-Output determination in Perfect competition, Monopoly, Monopolistic competition and Oligopoly. 
          Pricing philosophy – Pricing methods in practice: Price discrimination, product line pricing. Pricing 
          strategies: skimming pricing, penetration pricing, Loss Leader pricing. Pricing of multiple products. 
        5.  Inflation and Business Cycles:-Definition and meaning-characteristics of Inflation- types of inflation - 
          effects of inflation - Anti-Inflationary methods - Definition and characteristics of business cycles-phases 
          of business cycle - steps to avoid business cycle 
     
          Textbooks: 
        ❖  Managerial Economics •Analysis, Problems, Cases, Mehta, P.L., Sultan Chand &Sons. 
        ❖  Managerial Economics, Gupta, TMH 
     
          References: 
        ❖  Managerial Economics, D.N.Dwivedi,Eighth Edition,Vikas Publications 
        ❖  Managerial Economics, Pearson Education, James L.Pappas and Engene F.Brigham 
        ❖  Managerial Economics, Suma Damodaran, Oxford. 
        ❖  Macro Economics by MN Jhingan-Oxford 
        ❖  Managerial Economics- Dr.DM.Mithani-Himalaya Publishers 
        ❖  Managerial Economics-Dr.H.L Ahuja-S.Chand and Com pvt ltd, New Delhi 
        ❖  Managerial Economics by Dominick Salvatore, Ravikesh Srivastava- Oxford 
          University press. 
        ❖  Managerial Economics by Hirschey- Cengage Learning. 
        UNIT-1 INTRODUCTION TO MANAGERIAL ECONOMICS  BALAJI INSTITUTE OF IT AND MANAGEMENT-KADAPA 
        MANAGERIAL ECONOMICS          ICET-BIMK        SUBJECT CODE: 17E00103 
     
     
                                         UNIT-I 
                      INTRODUCTION TO MANAGERIAL ECONOMICS 
     
           Managerial economics is an integral part of business. Demand, supply, cost, production, 
        market, competition, price, etc. are important concepts in real business decisions. A study of 
        managerial  economics  enriches  the  analytical  skills,  helps  in  the  logical  structuring  of 
        problems, and provides adequate solution to the economic problems. Managerial economics 
        draws on economic analysis for such concepts as cost, demand, profit and competition. The 
        terms used Business Economics and Managerial Economics are often synonyms. It is also 
        known as ‘Economics for Managers. Economics is an Applied Economics in the sphere of 
        business management. 
                   Managerial Economics = Management + Economics 
     
       Definition of Managerial Economics- 
        “Managerial Economics is the integration of economic theory with business practice for the 
        purpose of facilitating decision-making and forward planning by management.” 
                                                   - Spencer & Siegelman 
     
       “Managerial Economics is economics applied in decision-making. It is a special branch of 
       economics bridging the gap between the economic theory and managerial practice. Its stress is 
       on  the  use  of  the  tools  of  economic  analysis  in  clarifying  problems  in  organizing  and 
       evaluating information and in comparing alternative courses of action.” 
                                                     -W. W. Haynes 
     
       “Economics is concerned with the application of economic principles and methodologies to 
       the  decision  making  process  within  the  firm  or  organization  under  the  conditions  of 
       uncertainty”                                  - Prof. Evan J Douglas 
        UNIT-1 INTRODUCTION TO MANAGERIAL ECONOMICS  BALAJI INSTITUTE OF IT AND MANAGEMENT-KADAPA 
        MANAGERIAL ECONOMICS          ICET-BIMK       SUBJECT CODE: 17E00103 
     
    Economics 
       The branch of knowledge concerned with the production, consumption, and transfer of 
     wealth. 
     
     Management 
       Management is the science and art of getting things done through people. 
     
     
     Manager 
       Manager is  a  person  who  directs  resources  to  achieve  a  stated  goal  and  he/she  has  the 
       responsibility for his/her own actions as well as for the actions of individuals, Machines and 
       other inputs under the manager’s control. Get things done through People in organization, 
       Resources such as 
     
                               Men 
     
                               Materials 
                               Machine 
                               Money and Technology. 
     
     
     
        Managerial Economics is the study of how scarce resources are directed most efficiently to 
        achieve managerial goals. It is a valuable tool for analyzing business situations to take better 
        decisions 
        Management Functions 
     
               •  Planning 
               •  Organizing 
               •  Staffing 
               •  Directing and the efforts of his staff 
               •  Controlling 
        UNIT-1 INTRODUCTION TO MANAGERIAL ECONOMICS  BALAJI INSTITUTE OF IT AND MANAGEMENT-KADAPA