Course Learning Objectives:
The Learning objectives of this paper are to understand the concept and nature of Managerial
Economics and its relationship with other disciplines and also to understand the Concept of
Demand and Demand forecasting.
To familiarize about the Production function, Input Output relationship, Cost-Output
relationship and Cost-Volume-Profit Analysis.
To understand the nature of markets, Methods of Pricing in the different market structures
and to know the different forms of Business organization and the concept of Business
Cycles.
To learn different Accounting Systems, preparation of Financial Statement and uses of
different tools for performance evaluation.
Finally, it is also to understand the concept of Capital, Capital Budgeting and the techniques
used to evaluate Capital Budgeting proposals.
Course Outcomes:
The Learner is equipped with the knowledge of estimating the Demand and demand
elasticities for a product.
The knowledge of understanding of the Input-Output-Cost relationships and estimation of
the least cost combination of inputs.
The pupil is also ready to understand the nature of different markets and Price Output
determination under various market conditions and also to have the knowledge of different
Business Units.
The Learner is able to prepare Financial Statements and the usage of various Accounting
tools for Analysis.
The Learner can able to evaluate various investment project proposals with the help of
capital budgeting techniques for decision making.
Unit-I
Introduction to Managerial Economics and demand Analysis:
Definition of Managerial Economics –Scope of Managerial Economics and its relationship with
other subjects –Concept of Demand, Types of Demand, Determinants of Demand- Demand
schedule, Demand curve, Law of Demand and its limitations- Elasticity of Demand, Types of
Elasticity of Demand and Measurement- Demand forecasting and Methods of forecasting,
Concept of Supply and Law of Supply.
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Unit – II:
Theories of Production and Cost Analyses:
Theories of Production function- Law of Variable proportions-Isoquants and Isocosts and
choice of least cost factor combination-Concepts of Returns to scale and Economies of scale-
Different cost concepts: opportunity costs, explicit and implicit costs-Fixed costs, Variable Costs
and Total costs –Cost –Volume-Profit analysis-Determination of Breakeven point(problems)-
Managerial significance and limitations of Breakeven point.
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Unit – III:
Introduction to Markets, Theories of the Firm & Pricing Policies:
Market Structures: Perfect Competition, Monopoly, Monopolistic competition and Oligopoly –
Features – Price and Output Determination – Managerial Theories of firm: Marris and
Williamson’s models – other Methods of Pricing: Average cost pricing, Limit Pricing, Market
Skimming Pricing, Internet Pricing: (Flat Rate Pricing, Usage sensitive pricing) and Priority
Pricing, Business Cycles : Meaning and Features – Phases of a Business Cycle. Features and
Evaluation of Sole Trader, Partnership, Joint Stock Company – State/Public Enterprises and their
forms.
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Unit – IV:
Introduction to Accounting & Financing Analysis:
Introduction to Double Entry System, Journal, Ledger, Trail Balance and Preparation of Final
Accounts with adjustments – Preparation of Financial Statements-Analysis and Interpretation of
Financial Statements-Ratio Analysis – Preparation of Funds flow and cash flow analysis
(Problems)
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Unit – V:
Capital and Capital Budgeting: Capital Budgeting: Meaning of Capital-Capitalization-
Meaning of Capital Budgeting-Time value of money- Methods of appraising Project
profitability: Traditional Methods(payback period, accounting rate of return) and modern
methods(Discounted cash flow method, Net Present Value method, Internal Rate of Return
Method and Profitability Index)
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TEXT BOOKS:
1. R Aryasri, Managerial Economics and Financial Analysis, The McGraw – Hill companies.
REFERENCES:
1. Varshney R.L, K.L Maheswari, Managerial Economics, S. Chand & Company Ltd,
2. JL Pappas and EF Brigham, Managerial Economics, Holt, R & W; New edition edition
3. N.P Srinivasn and M. SakthivelMurugan, Accounting for Management, S. Chand &
Company Ltd,
4. MaheswariS.N,AnIntroduction to Accountancy, Vikas Publishing House Pvt Ltd
5. I.M Pandey, Financial Management , Vikas Publishing House Pvt Ltd
6. V. Maheswari, Managerial Economics, S. Chand & Company Ltd,