T. A.

PAI MANAGEMENT INSTITUTE, MANIPAL

MANAGERIAL ECONOMICS

Programme: PGDM
Batch: 2019 – 2021
Term: 1
Course Name: Managerial Economics (ECO 5001)
Credits: 3 (30 Hours)
Course Instructor/s: Prof. Sulagna Mukherjee (Core), Prof. S. Rajasulochana (Core),
and Prof. Abhishek Kumar Rohit (Core)

PART 1

INTRODUCTION

The course “managerial economics” deals with the fundamental principles of economics for
managerial decision-making. At its core, the study of economics deals with the choices and decisions
that have to be made in order to manage scarce resources available to us. It covers the essential
microeconomics tools such as demand and supply, production, cost, revenue and market structures,
and their application to different functional areas of the business. The Course will help in decision
making and will also acts as a link between economic practice and economic theory.

COURSE OBJECTIVES (CO)

1. Apply basic economic concepts such as demand, supply, elasticity, marginal cost-benefit analysis
and opportunity cost in formulating rational business decisions
2. Understand the theories of production and costs as a framework for managerial decision making
3. Analyse firm behaviour, and its pricing and output decisions under different types of market
structures

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COURSE LEARNING OUTCOMES (CLO)

By virtue of the learning gained in this course, the student should be able to:

CLO 1: Apply microeconomic models/tools to explain consumption and consumer choice. (PLG 1)

CLO 2: Demonstrate the applicability of production and cost frameworks in formulating rational
business decisions behaviour. (PLG 2)

CLO 3: Analyse the pricing practices and output determination under different market structures.
(PLG 3)

COURSE CONTENT
 Demand and supply
 Elasticity
 Consumption
 Risk and Uncertainty
 Production and Cost
 Market structure
 Sophisticated Pricing Strategies

PRESCRIBED TEXT BOOK(s)

Pindyck, R. and Rubenfield, D. L. (2017): Microeconomics. 8th Edition, New Delhi: Pearson [PR]

OTHER READINGS AND REFERENCES

a. Hirschey, M. (2009): Managerial Economics. 12th Edition, Cengage Learning India Private Limited.
b. Hirschey, M. (2006): Basic Economics for Managers. 8th Edition, Thomson South-Western.
c. Petersen, H. C., Lewis, W. C. and Jain, S. K. (2006): Managerial Economics. 4th Edition, Pearson
India.
d. Sloman, J., Garratt, D., Guest, J. and Jones, J. (2016): Economics for Business. 7 th Edition, Pearson.
e. Frank, R. (2009): Microeconomics and Behaviour. 8th Edition, McGraw Hill International.
f. Earl, P. E. (1995): Microeconomics for Business and Marketing. Edward Elgar Publishing.
g. Salvatore, D. and Rastogi, S. K. (2016): Managerial Economics: Principles and Worldwide
Applications (Adopted version). 8th Edition, New Delhi: Oxford University Press.

POLICY ON PLAGIARISM:

Plagiarism of any kind and to any extent would attract penalties. The assessment would be ‘zero’ for
that particular component, with no further opportunity to improve. Repetition of the offence would
result in failure in the subject.

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ASSESSMENT SCHEME AND WEIGHTAGE:

{a} MID-TERM & END-TERM

Evaluation Weightage (%) Duration Minutes Open/close Book CLO Tested

Mid-Term 30 90 Close book CLO 1 & 2
End-Term 40 120 Close book CLO 1 & 3

{b} OTHER ASSESSMENTS

S. No. Evaluation Item* Unit of Evaluation Weight Time CLO

1 Quiz 1 Individual 10% After 6th session CLO 1

2 Case 1 – Class Participation Individual 5% On 16th session CLO 3
3 Quiz 2 Individual 10% After 16th session CLO 2
4 Case 2 – Class Participation Individual 5% On 19th session CLO 3

PART 2: SESSION PLAN

Additional
Sessio Reading &
Topic (s) Pedagogy Reading
n References
*
Introduction
1 Demand and Discussion  [PR]Ch. 1 e Ch.1
Supply
Demand and
Lecture and problem
2 Supply (Continued) a, b, c, d, e, f,
solving [PR]Ch. 2
Elasticity
Discussion with problem
3 Elasticity  [PR] Ch. 2& 4 g (Chapter 3 )
solving
A Classroom game for
developing market
Game and discussion of
4 Elasticity game demand and demand
results
elasticities: The
snicker effect†
Theory of Discussion and problem
5 and 6  [PR] Ch. 3 a, b, c, d, e, f
Consumer Choice solving

3
 Quiz 1 – Wt 10%

Additional
Sessio Reading &
Topic (s) Pedagogy Reading
n References
*
Uncertainty and
7&8 Consumer Discussion with examples  [PR] Ch. 5
Behaviour
Discussion and problem
9 &10 Production  [PR] Ch. 6 a, b, c, d, e, f
solving
Discussion, Case let and
11& 12 Cost  [PR] Ch. 7 a, b, c, d, e, f
problem solving
Profit
Maximization and
13 Discussion with examples  [PR] Ch. 8 a, b, c, d, e, f
Competitive
Supply
Perfect
14 Discussion with examples  [PR] Ch. 9 a, b, c, d, e, f
competition
The Analysis of the
15 Competitive Discussion with examples  [PR] Ch. 9 a, b, c, d, e, f
Market

Discussion with examples  [PR] Ch. 10

16 Monopoly
Case discussion Search Engines in a, b, c, d, e, f
(5% Weightage) Search of Fair Play

Quiz 2 – Wt 10%
Price Case let, discussion with
17  [PR] Ch. 11 a, b, c, d, e, f
discrimination examples
Bundling and Two- Case let, discussion with
18  [PR] Ch. 11
Part Tariff examples
Maruti Suzuki India
Case discussion
19 Oligopoly CASE Limited: Sustaining
(5% Weightage)
Profitability

20 Wrap-up session

* Please refer to ‘Other readings & references’ as per the indicators a, b, c & d listed above the plagiarism
policy note.
Note: † HillC. D. (2001): A Classroom Game for Developing Market Demand and Demand Elasticities: The Snicker Effect.
Department of Economics, Idaho State University. Available at:
https://www.marietta.edu/~delemeeg/expernom/Fall2001/hill.html, accessed on July 10, 2014
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 PLG MAPPING FOR THE COURSE

Addressed
CLO
PLG# Program Level Learning Goal by Course?
No.
(Yes / No)
Application of Fundamentals
PLG1 Traits: Demonstrate application of functional / conceptual YES CLO 1
knowledge to business situations
Problem Identification and Solution
PLG2 Traits:Demonstrate ability to identify a problem, critically assess YES CLO 2
various alternatives and suggest appropriate solution
Integrative Thinking
Traits:Demonstrate ability to identify inter-linkages among YES CLO 3
PLG3
functional areas within an enterprise and assess the impact of
external environment on its performance
Effective Communication
PLG4 NO NA
Traits:Demonstrate proficiency in Oral and Written Communication
Ethical Responsibility
PLG5 Traits:Demonstrate awareness and assess impact of ethical NO NA
behaviour on business
Leadership
PLG6 Traits:Demonstrate capability to take leadership role in a business NO NA
situation

PART 3: SUPPLEMENTARY INFORMATION

Not Applicable

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