PREFACE The economic techniques have gained a wide application in the process of modem management decision, possible, because recent business problems have become so complex that manager's personal experience is no longer adequate to give an appropriate solution. The purpose of this book is to provide, in one volume, the different economic theories which are deemed to constitute the subject matter of managerial economics. This book is written especially for B.Com., B.B.A., M.Com., M.B.A., and c.A. students of our country. This book is intended to explain in non-technical language, the economic concepts, tools of analysis, their relevance in management decision-making and also the influence of economic environment on management decisions. To facilitate an easy understanding of the subject, the timely help of illustrations, examr::es, diagrams, tables and charts has been taken, Important terms relevant to the business economics are given in a separate chapter. To my publisher, I am grateful for publishing the book with due care and skill in a very short time. I shall be thankful to the readers for pointing out discrepancies and errors in the text, which I hope to rectify in the next edition of the book. Suggestions for further improvement of this book will be highly appreciated.
CONTENTS Preface iii I. Introduction 1 2. Managerial Economist Role and Responsibilities 8 3. Concepts of Managerial Economics 15 4. Measurement Techniques of Marginal Economics 25 5. Important Terms used in Managerial Economics 36 6. Economic Theories 55 7. Production Theory 62 8. Consumer Behaviour 76 9. Indifference Curves Approach 84 10. Extension and Contraction Versus Increase and Decrease 105 in Demand II. Elasticities of Demand 110 12. Empirical Studies on Demand 119 13. Demand Forecasting 126 14. Form of Market Structure 157 15. Perfect Competition 160 16. Implications of a Change in Demand for Commodity Under 173 Competition 17. Competitive Market Model 180 18. Dynamics of Supply: The Cobweb Phenomena 19. Pure Monopoly 20. Discriminating Monopoly 21. Bilateral Monopoly 22. Monopolistic Competition 23. Market Imperfection and Excess Capacity 24. Profit Decisions 25. Functions of Profit 26. Theories of Profit 27. Investments 28. Business Forecasting 29. Business Cycles 30. Theory of Trade Cycles