Objectives :

This course is meant to acquaint the students with the principles of Business Economics as are applicable in
business.

Unit - 1 15%

Introduction : Basic problems of an economy; Working of price mechanism.

Unit - 2 15%

Elasticity of Demand : Concept and measurement of elasticity of demands; Price, income and cross elasticity's;
of demand; Importance of elasticity of demand.

Unit - 3 15%

Production Function : Law of variable proportions; Iso-quants; Economic regions and optimum factor combination;
Expansion path; Returns to scale; Internal and external economics and diseconomies; Ridge lines.

Unit - 4 15%

Theory of Costs : Short-run and long-run cost curves traditional and modern approaches.

Unit - 5 20%

(a) Perfect Competition : Profit maximization and equilibrium of firm and industry; Short-run and long-run supply
curves; Price and output determination. Practical application.
(b) Monopoly : Determination of price under monopoly; Equilibrium of a firm; Comparison between perfect competition
and monopoly; Multi-plant monopoly; price discrimination. Practical applications.
(c) Monopolistic Competition : Meaning and characteristics; Price and output determination under monopolistic
competition; Product differentiations differentiations; selling costs; comparison with perfect competition; Excess
capacity under monopolistic competition.

Unit - 6 20%

(a) Factor Pricing - I : Marginal productivity theory and demand for factors; Nature of supply of factors inputs;
Determination of wage rates under perfect competition and monopoly; Exploitation of labor; Rent-concept.
Ricardian and modern theories of rent; Quotient.
(b) Factor Pricing - II : Interests - concept and theories of interest; Profit nature, concepts and theories of profit.

Suggested Readings :

1. John P.Gould, Jr.and Edward P.Lazear, Micro economic Theory All India Traveler, Delhi.
2. Browning Edger K.and Browning Jacquenlence M: Microeconomic Theory and Applications; Kalyani, New Delhi.
3. Waston Donald S. and Getz Moloclim : Price Theory and Its Uses; Khosla publishing house, New Delhi.
4. Koutsoyianni A. : Modern Microeconomics; Macmillan, New Delhi.
5. Richard G, Lipsey : An Introduction to positive Economics; ELBS, Oxford.
6. Stigler G: The theory of Price; Prentice Hall of India.
7. Nellis & parker : The Essence of Business Economics; Prentice Hall, New Delhi.
8. Ferguson P.R. and Rothschild R., and Ferguson G.J. : Business Economics; Macmillan, Hampshire.
9. Ahuja H.L.: Business Economics; S.Chand & Co., New Delhi.