Managerial Economics

Faculty Offering

Anshul Aggarwal

Assistant Professor, General Management & Public Policy

Dipankar Das

Assistant Professor, General Management & Public Policy

Prakash Singh

Associate Professor, General Management & Public Policy

Swarna Parameswaran

Assistant Professor, General Management & Public Policy

Programme / Term

PGDM-FT / I (at GIM)

No. of sessions

16 sessions

Course description

Managerial Economics provides a solid foundation for economic analysis and thinking. The concepts and frameworks of Managerial Economics apply to Finance, Marketing, Operations, Strategy, Human Resource Management, and many other fields. The course also lays the foundation for managerial decision-making.

Programme / Term

Students will be able to apply managerial economics concepts such as the law of demand & supply, elasticity, etc., to analyze business situation
Interpret various economic factors in managerial decision-making.
Students will be able to analyze managerial economics concepts and data to present a solution to a management problem.
Students will be able to apply and analyze managerial economics techniques to formulate business strategies.

1. Core Courses

a. Synchronous (topics and sub-topics to be covered in class) –

The basics of supply and demand
- Demand and supply, market forces, market equilibrium, shifts in demand and supply, the impact of the shift in the demand and supply on the equilibrium, Difference between Giffen and inferior goods, government interventions- price ceiling and floor price
- Own-price elasticity, cross-price elasticity, income elasticity, advertisement elasticity
- Basics of production and applications of costs
Overview of market structures- perfect competition, monopoly, oligopoly, monopolistic competition
Introduction to Pricing Strategies
- Price discrimination, two-part tariff, Peak-load pricing and bundling
Externalities and Public Goods
- Externalities and ways of correcting market failure

b. Asynchronous (topics and subtopics for self-study through provided learning resources and MOOCs) –

Methodology

Lecture delivery, Storytelling, Classroom Discussion using real-world examples

Group Projects and Journal

Group projects are an integral part of learning. Students are expected to form into groups of 4/5 to work on their projects. The projects would be due a week from the close of the term. Proposals are due by the 6th class. Students are expected to take a project in consultation with the instructor. The proposals must include a statement of the problem they seek to address, breaking down the same in to questions and an indication of how they would address the same. They should pose the questions sharply, and if the working involves data they must indicate the data sources as well.
Students would maintain a journal in which they would record questions that they raised and the learnings, on a session by session basis. The same would be submitted for evaluation.

For whom

Students seeking a deep understanding of the new opportunities in PPPs and private capital in infrastructure, and willing to work hard would find the course engaging and useful.
Consultants in government and infrastructure verticals, developers, regulators, and senior (credit) staff of BSFIs seeking to finance infrastructure projects, would find the course very useful saving them many years of learning on the job. Prerequisites for the course would be basics of microeconomics, capital finance, and financial markets.
Students should have a sound knowledge of basic concepts in financing, microeconomics, and organizational management. This course would not suit the causal attendee.

Evaluation

Title

Percentage

Class Participation

10%

Quiz

20%

Mid Term Examination

30%

End-term examination

40%

TOTAL

100%

Section wise outline

Session Seq /Date & Time

Topic

Cases/Readings

1 Introduction

PR Chapter 1

2-3

The basics of supply and demand- Law of demand, determinants of demand, demand shifts, market demand, demand function and estimation, Giffen good

PR Chapter 2, 4

4 Law of supply, determinants of supply, shift of the supply curve supply function

PR Chapter 2,4

5 Market equilibrium, Impacts of a shift in the demand and supply curve on the market equilibrium,

PR Chapter 2

6-7

Elasticity- Price elasticity, Income elasticity, advertisement elasticity, cross-price elasticity

PR Chapter 4

8 Effects of Government intervention – Price control measures

PR Chapter 2, Handouts

9 Basics of production- returns to scale, economies of scale and scope

PR Chapters 6

10-11

Cost and its applications

PR Chapters 6, 7

12-13

Overview of Market structures- perfect competition, monopoly, oligopoly, monopolistic competition

PR Chapters 9, 10, 12

14 Introduction to Pricing Strategies- Price discrimination, Peak-load pricing, Two Part tariff, Bundling

PR Chapter 11

15-16

Externalities and Public Goods-Externalities, ways of correcting market failure

PR Chapter 18

16 Review

Handout

23 and 24

Non-linear regression models & Qualitative response regression models

Reference Books

Pindyck, R., & Rubinfeld, D. (2018). Microeconomics (9th Edition). New York, NY: Pearson. (Hereafter mentioned as “PR”)
Baye, M. (2017). Managerial Economics and Business Strategy (8th Edition). New York, NY: McGraw-Hill (Hereafter mentioned as “BM”)

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