Managerial Economics

An application of microeconomic theory to managerial decision-making, covering market dynamics, consumer behavior, market structures, and modern business challenges.

Managerial Economics provided a practical framework for applying microeconomic principles to real-world business decisions. The course began with the fundamentals of supply, demand, and consumer behavior, before moving into the analysis of production, technology, and costs from a firm’s perspective. A major part of the course was a detailed examination of various market structures, from perfect competition to monopoly and monopolistic competition. This theoretical knowledge was then applied to complex managerial challenges, including making decisions under uncertainty, dealing with asymmetric information, navigating government regulations, and understanding the unique economics of modern platform businesses.

Instructor

Prof. Vimal Kumar, Associate Professor, Department of Economic Sciences, IIT Kanpur

Course Schedule & Topics

The course is structured over 12 weeks, covering core microeconomic theories and their application in business strategy.

Week Primary Focus Key Topics Covered
1 Introduction to Managerial Economics Overview of the course and the role of economics in managerial decision-making.
2 Market Fundamentals Analysis of Demand, Supply, and market equilibrium.
3 Demand Analysis Elasticity and empirical methods for analyzing and forecasting demand.
4 Consumer Behavior Understanding consumer choice, utility theory, and indifference curves.
5 Production and Costs Technology, production functions, cost minimization, and different types of costs.
6 Perfectly Competitive Markets Characteristics, pricing, and output decisions in perfectly competitive markets.
7 Monopoly Market power, pricing strategies, and welfare implications of a monopoly.
8 Imperfect Competition Exploring market structures like Monopsony and Monopolistic Competition.
9 Decision Making Under Uncertainty Frameworks for making decisions when outcomes involve risk and uncertainty.
10 Asymmetric Information Problems of adverse selection and moral hazard, and potential solutions.
11 Government & Business Interaction The impact of government policies and regulations on business operations.
12 Modern Platform Businesses The economics of two-sided markets, network effects, and digital platform strategies.

Material used