The present book has been prepared for the students of First Year B.Com. (Banking and Insurance), First Semester, University of Mumbai. In accordance with the requirements of the syllabus, the discussion is divided into five modules. The coverage, organisation and contents of those modules are as follows:
Module I on 'Introduction' consists of two chapters. It discusses the meaning and nature of business economics, basic tools of analysis, basic economic relations, use of marginal analysis in decision making, demand and supply functions, market equilibrium and price determination, and consequences of shifts in demand supply.
Module II on 'Demand Analysis' consists of three chapters. It discusses the nature of demand curve under different market structures, the concepts of price elasticity, income elasticity, cross elasticity, promotional elasticity of demand, meaning and significance of demand forecassting and different methods of demand forecasting.
Module III on 'Supply and Production Decisions and Cost of Production' consists of four chapters. It discusses the concepts of production function, relationship between total, average and marginal product curve, the law of variable proportions, isoquants and their properties, ridge lines, the optimum combination of factors and producer's equilibrium, the expansion paths, concept of returns to scale, economies and diseconomies of scale, economies of scope, theory of costs in the short-run and longrun, learning curve and break-even analysis.
Module IV on 'Market Structure: Perfect Competition and Monopoly and Pricing and Output Decisions under Imperfect Competition' consists of four chapters. It discusses pricing under perfect competition, equilibrium of the firm and industry under perfect competition, time element in the theory of competitive price, short-run and long-run equilibrium under monopoly, concept of monopolistic competition, short-run and long-run equilibrium under monopolistic competition, selling costs and advertising under monopolistic competition, key attributes of oligopoly, collusive and non-collusive oligopoly, Cournot's duopoly model, kinked demand curve model and price rigidity, cartels and price leadership models.
Module V on 'Pricing Practices' consists of one chapter devoted to a discussion of markup pricing, marginal cost pricing, plus (full cost) pricing, discriminatory pricing, transfer pricing and multiproduct pricing.
Module I : Introduction
1. Scope and Importance of Business Economics
2. Demand and Supply
Module II : Demand Analysis
3. Demand Function: Nature of Demand Curve under Different Markets
4. Elasticity of Demand
5. Demand Forecasting
Module III : Supply and Product Decisions and Cost of Production
6. Theory of Production: Law of Variable Proportions
7. Isoquants and Producer's Equilibrium
8. Returns to Scale and Economies of Scale
9. Theory of Costs
Module IV : Market Structure: Perfect Competition and Monopoly and Pricing and Output Decisions under Imperfect Competition
10. Perfect Competition
12. Monopolistic Competition
13. Oligopolistic Markets
Module V : Pricing Practices
14. Pricing Practices