Introduction to Economics and managerial Decision Making, the Economics of a business, a brief review of important economic terms and concepts; Supply and Demand - market demand, market supply, determinants of supply and demand, short run market changes and long run market analysis, comparative statics analysis, Demand Elasticity - the economic concept of elasticity, the price elasticity of demand, the cross-elasticity of demand, income elasticity, other elasticity measures, elasticity and total revenue; Elasticity of Supply. Applications of elasticity. Marginal utility, the law of diminishing marginal utility
The theory and estimation of production - the production function, a short-run analysis of total, average, and marginal product, the three stages of production in the short run, long run and the law of diminishing returns, derived demand and the optimal level of variable input usage. Forms of production function.
The Theory and Estimation of Cost - the importance of Cost in managerial decisions, the relationship between production and cost, the short-run cost function, the long-run cost function, economies of scale.
Pricing and output decisions - Competition and market types, pricing and output decisions in perfect competition, selecting optimum output level, competitive market in the long run; Pricing and output decisions in monopoly markets, implications for managerial decision making. Pricing and output decisions in monopolistic competition; oligopoly and market concentration, pricing in oligopolistic market.
Management accounting: Balance Sheet and Profit and Loss account – financial statements, assets, liabilities, and owner’s equity, relationship between assets, liabilities and owner’s equity, forms of the balance sheet, profit and loss account, relation between balance sheet and profit and loss account. Cost classifications and allocation - nature of cost, historical and future costs, cost classifications in a manufacturing firm, cost concepts for planning and control, cost allocation; costvolume-profit analysis and operating leverage; Break-even analysis, break-even point, operative leverage.
Capital expenditure planning - nature of investment decisions, investment evaluation criteria, time value of money, net present value method, internal rate of return method, profitability index, payback period, accounting rate of return method, cash flows for investment analysis. Capital budgeting process.