Business Economics – I FYBCOM Semester I Manan Prakashan

1. Introduction (10 Lec.)
Scope and Importance of Business Economics – basic tools- Opportunity Cost principle- Incremental and Marginal Concepts. Basic economic relations – functional relations: equations- Total, Average and Marginal relations- use of Marginal analysis in decision making
The basics of market demand, market supply and equilibrium price- shifts in the demand and supply curves and equilibrium
2. Demand Analysis (15 Lec.)
Demand Function – Nature of demand curve under different markets
Meaning, significance, types and measurement of elasticity of demand (Price, income cross and promotional)- relationship between elasticity of demand and revenue concepts
Demand Estimation and Forecasting: Meaning and significance – methods of demand estimation : survey and statistical methods (numerical illustrations on trend analysis and simple linear regression)
3. Supply and Production Decisions (10 Lec.)
Production Function: Short run analysis with Law of Variable Proportions- Production function with two variable inputs- isoquants, ridge lines and least cost combination of inputs- Long run production function and Laws of Returns to Scale – expansion path – Economies and diseconomies of Scale and economies of scope
4. Cost of Production (10 Lec.)
Cost Concepts: Accounting cost and economic cost, implicit and explicit cost, social and private cost, historical cost and replacement cost, sunk cost and incremental cost -fixed and variable cost – total, average and marginal cost – Cost Output Relationship in the Short Run and Long Run (hypothetical numerical problems to be discussed)
Extensions of Cost Analysis: Cost reduction through experience – LAC and Learning Curve – Break even analysis (with business applications)