Subject Overview

Managerial Economics applies economic theory, quantitative analysis and strategic reasoning to managerial decisions. The subject integrates demand, production, cost, competition, pricing, risk, information, regulation, macroeconomic conditions and digital-market developments to support responsible value creation.

Learning Goal

On completion, students will be able to diagnose business problems using economic frameworks, estimate and forecast market outcomes, optimize resource allocation, formulate competitive and pricing strategies, assess uncertainty and policy impacts, and make ethical, evidence-based managerial decisions in traditional and digital markets.

Syllabus

1. Foundations and Scope of Managerial Economics

Learning Objective: Explain scarcity, choice, incentives, opportunity cost, marginal and incremental analysis, trade-offs, economic profit, equilibrium, efficiency and value creation; apply the decision-making process to managerial problems.

Category: foundation

2. Quantitative Methods and Economic Optimization

Learning Objective: Use functions, graphs, elasticity, constrained and unconstrained optimization, linear programming, sensitivity analysis and spreadsheet-based models to determine optimal managerial choices while recognizing model assumptions and limitations.

Category: foundation

3. Demand, Supply and Market Equilibrium

Learning Objective: Analyze determinants of demand and supply, equilibrium changes, consumer and producer surplus, price controls, taxation and elasticity; translate market signals into operating and strategic decisions.

Category: core

4. Consumer Choice and Behavioral Economics

Learning Objective: Apply utility, preferences, budget constraints, indifference analysis, revealed preference and behavioral concepts—including bounded rationality, framing, biases and nudges—to product design, marketing and customer decisions.

Category: core

5. Demand Estimation and Business Forecasting

Learning Objective: Estimate demand using market research, regression, experiments and causal inference; develop time-series and scenario forecasts, evaluate accuracy, and use analytics or AI responsibly while addressing data quality, privacy and model risk.

Category: application

6. Production, Productivity and Technology

Learning Objective: Analyze production functions, marginal productivity, isoquants, returns to scale, substitution and capacity; evaluate automation, process innovation, productivity measurement and technology adoption decisions.

Category: core

7. Cost Analysis and Economies of Scale

Learning Objective: Distinguish economic and accounting costs, fixed, variable, marginal, average, sunk and avoidable costs; analyze short- and long-run cost curves, learning effects, economies of scale, scope and experience for make-or-buy and capacity decisions.

Category: core

8. Market Structures and Competitive Positioning

Learning Objective: Compare perfect competition, monopoly, monopolistic competition and oligopoly; assess market power, concentration, barriers to entry, contestability and competitive advantage using industry and economic analysis.

Category: core

9. Pricing and Revenue Management

Learning Objective: Design profit-oriented pricing using markups, elasticity, price discrimination, bundling, two-part tariffs, transfer pricing, dynamic pricing and yield management; consider fairness, transparency, competition law and customer response.

Category: application

10. Game Theory and Strategic Interaction

Learning Objective: Apply dominant strategies, Nash equilibrium, sequential games, backward induction, repeated games, commitment, signaling and entry deterrence to rivalry, negotiation, collaboration and competitive strategy.

Category: advanced

11. Decisions under Risk, Uncertainty and Time

Learning Objective: Use expected value, utility, decision trees, Bayesian updating, simulation, sensitivity analysis, discounting, net present value and real options to evaluate uncertain, intertemporal and irreversible managerial decisions.

Category: advanced

12. Information Economics, Incentives and Organizational Design

Learning Objective: Evaluate asymmetric information, adverse selection, moral hazard, signaling, screening, transaction costs and principal–agent problems; design contracts, incentives, governance mechanisms and organizational boundaries.

Category: advanced

13. Macroeconomic and Global Business Environment

Learning Objective: Interpret national income, inflation, unemployment, interest rates, exchange rates, business cycles, monetary and fiscal policy, trade and capital flows; assess their implications for forecasting, investment, financing and international strategy.

Category: strategic

14. Public Policy, Regulation, Ethics and Sustainability

Learning Objective: Analyze externalities, public goods, market failure, antitrust, sector regulation and government intervention; integrate stakeholder welfare, environmental economics, ESG considerations, ethical pricing and accountable governance into decisions.

Category: strategic

15. Digital, Platform and AI Economics

Learning Objective: Assess network effects, multisided platforms, data economics, zero-price markets, switching costs, algorithmic pricing and digital ecosystems; evaluate AI-driven productivity and competition, regulatory developments, responsible innovation and emerging business models through integrated cases.

Category: contemporary