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Essentials of Business economics
Essentials of Business economics
T. Aryamala
ISBN 9789394828377
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This book Essentials of Business Economics is comprehensive, clear, simple, and student-friendly. It is designed as an essential textbook for students of B.Com, B.B.A. and B.A. courses of Madras university.

  • Cover
  • Title Page
  • Copyright Page
  • Dedication
  • Contents
  • Preface
  • Chapter 1 Introduction to Economics
    • 1.1 Introduction
    • 1.2 Definition of Economics
      • 1.2.1 Wealth Definition: Adam Smith
      • 1.2.2 Welfare Definition: Alfred Marshall
      • 1.2.3 Scarcity Definition: Lionel Robbins
      • 1.2.4 Growth Definition: Paul A Samuelson
    • 1.3 Scope of Economics
      • 1.3.1 Consumption
      • 1.3.2 Production
      • 1.3.3 Exchange
      • 1.3.4 Distribution
      • 1.3.5 Public Finance
    • 1.4 Importance and Significance of the Study of Economics
    • 1.5 Nature of Economics: an Art or Science?
      • 1.5.1 Economics as a Science
      • 1.5.2 Economics as an Art
      • 1.5.3 Economics Both a Science and an Art
    • 1.6 Economics – A Positive or a Normative Science
      • 1.6.1 Economics as a Positive Science
      • 1.6.2 Economics as a Normative Science
      • 1.6.3 Interdependence of Positive and Normative Science
    • 1.7 Methods: Micro and Macro
      • 1.7.1 Microeconomics
      • 1.7.2 Macroeconomics
      • 1.7.3 Interdependence of Micro and Macroeconomics
    • 1.8 Methods of [Constructing an Economic Theory] Economic Analysis
      • 1.8.1 Deductive Method [From General to Particular]
      • 1.8.2 Inductive Method [From Particular to General]
      • 1.8.3 Interdependence of Deductive and Inductive Methods
    • 1.9 Basic Economic Problems
      • 1.9.1 What Goods to be Produced and in What Quantities?
      • 1.9.2 How to Produce?
      • 1.9.3 For Whom to Produce?
      • 1.9.4 Economic Growth
    • 1.10 Economic Systems
      • 1.10.1 Capitalist Economy
      • 1.10.2 Socialist Economy
      • 1.10.3 Mixed Economy
    • Review Questions
  • Chapter 2 Introduction to Business Economics
    • 2.1 Introduction
    • 2.2 Definition of Business Economics
      • 2.2.1 General Economic Theory and Business Economics - A Comparison
    • 2.3 Nature and Scope of Business Economics
      • 2.3.1 Business Decisions
      • 2.3.2 Scope of Business Economics
    • 2.4 Relationship of Business Economics and Other Disciplines
      • 2.4.1 Business Economics and Economics
      • 2.4.2 Business Economics and Operation Research
      • 2.4.3 Business Economics and Accounting
      • 2.4.4 Business Economics and Mathematics
      • 2.4.5 Business Economics and Statistics
      • 2.4.6 Business Economics and Theory of Decision Making
      • 2.4.7 Business Economics and Computer Science
    • 2.5 Objectives of a Business Firm
      • 2.5.1 Profit Maximisation as an Objective of a Firm
      • 2.5.2 Sales Maximisation Goal
      • 2.5.3 Maximise the Rate of Growth Goal
      • 2.5.4 Welfare Goals
      • 2.5.5 Multi-Goals of a Modern Firm
      • 2.5.6 Long-term Objectives of Firms
    • 2.6 Decision Making in Business
    • 2.7 Economic Concepts in Business Application
      • 2.7.1 Production Possibility Frontiers
      • 2.7.2 Accounting Profit and Economic Profit
      • 2.7.3 The Opportunity Cost Principle
      • 2.7.4 Marginal Opportunity Cost
      • 2.7.5 Incremental Principle
      • 2.7.6 Principle of Time Perspective
      • 2.7.7 The Discounting Principles
      • 2.7.8 The Equi-Marginal Principle
      • 2.7.9 Concept of Efficiency
      • 2.7.10 Incrementalism and Marginalism
    • 2.8 Case Study Method
    • Review Questions
  • Chapter 3 Business Cycle
    • 3.1 Introduction
    • 3.2 Meaning
    • 3.3 Definition
    • 3.4 Features / Characteristics of a Business Cycle
      • 3.4.1 Cyclical Fluctuations
    • 3.5 Phases of Business Cycles
      • 3.5.1 Boom or Prosperity
      • 3.5.2 Recession
      • 3.5.3 Depression
      • 3.5.4 Recovery
      • 3.5.5 Inflation
      • 3.5.6 Deflation
      • 3.5.7 Reflation
    • 3.6 Causes of Business Cycle
      • 3.6.1 Internal Factors
      • 3.6.2 External Factors
    • 3.7 Consequences / Effects of Business Cycles
    • 3.8 Measures to Minimise the Effects of Cycles
      • 3.8.1 Preventive Measures
      • 3.8.2 Relief Measures
    • Review Questions
  • Chapter 4 Demand Analysis
    • 4.1 Introduction
    • 4.2 Meaning and Definition of Demand
    • 4.3 Features of Demand
    • 4.4 Demand Schedules and Demand Curves
      • 4.4.1 Individual Demand Schedule
      • 4.4.2 Market Demand Schedule
    • 4.5 Determinants of Demand/Factors Affecting Demand
    • 4.6 Law of Demand
      • 4.6.1 Definitions
      • 4.6.2 Assumption
      • 4.6.3 Explanation of the Law
    • 4.7 Reasons Behind Downward Slope of the Demand Curve
    • 4.8 Exceptions to the Law of Demand
    • 4.9 Movement: Expansion or Contraction of Demand
    • 4.10 Shift in the Demand Curve
    • 4.11 Types of Demand
      • 4.11.1 Price Demand
      • 4.11.2 Income Demand [Normal Goods]
      • 4.11.3 Cross-Demand
    • 4.12 Demand Distinction
      • 4.12.1 Producer’s Goods and Consumer’s Goods
      • 4.12.2 Durable and Non-durable Goods
      • 4.12.3 Derived Demand and Autonomous Demand
      • 4.12.4 Industry Demand and Company Demand
      • 4.12.5 Short-run and Long-run Demand
      • 4.12.6 Joint and Rival/Composite Demand
      • 4.12.7 Individual Demand and Market Demand
    • Review Questions
  • Chapter 5 Elasticity of Demand
    • 5.1 Meaning and Definition
    • 5.2 Determinants of Price Elasticity of Demand
    • 5.3 Importance of Elasticity of Demand
    • 5.4 Types of Elasticity of Demand
      • 5.4.1 Price Elasticity of Demand
      • 5.4.2 Income Elasticity of Demand
      • 5.4.3 Cross-elasticity of Demand
    • 5.5 Measurement of Elasticity of Demand
      • 5.5.1 Total Expenditure Method
      • 5.5.2 Percentage or Proportionate Method
      • 5.5.3 Geometric or Point Method
      • 5.5.4 Arc Elasticity of Demand
      • 5.5.5 Revenue Method
    • 5.6 Advertising and Demand
      • 5.6.1 Advertising Elasticity of Demand
      • 5.6.2 Another Formula
      • 5.6.3 Factors Affecting Advertising Elasticity of Demand
      • 5.6.4 Methods of Advertisement Outlays
      • 5.6.5 Role of Advertising
    • Review Questions
  • Chapter 6 Demand Forecasting
    • 6.1 Introduction and Meaning
    • 6.2 Objectives of Demand Forecasting
      • 6.2.1 Short-term Objectives
      • 6.2.2 Long-term Objectives
    • 6.3 Types of Forecasting
      • 6.3.1 Micro Level or at the Level of Firm
      • 6.3.2 Industry Level
      • 6.3.3 Macroeconomic Forecasting
      • 6.3.4 Short-term Demand Forecasting
      • 6.3.5 Long-term Demand Forecasting
      • 6.3.6 Medium-term Demand Forecasting
    • 6.4 Requirements for Demand Forecasting
      • 6.4.1 Elements Connected to Consumers
      • 6.4.2 Elements Concerning the Suppliers
      • 6.4.3 Elements Concerning the Market / Industry
      • 6.4.4 Miscellaneous Elements
    • 6.5 Approach to Forecast
    • 6.6 Methods of Demand Forecasting
      • 6.6.1 Survey or Opinion Method
      • 6.6.2 Statistical Methods
    • 6.7 Features of a Good Forecasting Method
    • 6.8 Forecasting Demand for New Products
    • Review Questions
  • Chapter 7 Supply Function
    • 7.1 Meaning and Definition
    • 7.2 Distinction Between Supply and Stock
    • 7.3 Factors Determining Supply
    • 7.4 Supply Schedule and Curve
      • 7.4.1 Supply Schedule of an Individual Firm
      • 7.4.2 Market Supply Schedule
      • 7.4.3 Supply Curve of a Firm
    • 7.5 Law of Supply
    • 7.6 Movement: Expansion or Contraction of Supply
    • 7.7 Shift in Supply Curve
    • 7.8 Elasticity of Supply
    • 7.9 Types of Elasticity of Supply
    • 7.10 Measurement of Elasticity of Supply
      • 7.10.1 Percentage Method
      • 7.10.2 Point Elasticity vs. Arc Elasticity
      • 7.10.3 Diagrammatic Method
    • 7.11 Determinants of Elasticity of Supply
    • 7.12 Importance of Elasticity of Supply
    • 7.13 Equilibrium of the Firm or Profit Maximisation
    • Review Questions
  • Chapter 8 Theory of Consumer’s Behaviour (Utility Analysis of Demand)
    • 8.1 Introduction
    • 8.2 Meaning and Measurement of Utility
      • 8.2.1 Measurement of Utility
    • 8.3 Concepts of Utility
      • 8.3.1 Initial Utility
      • 8.3.2 Marginal Utility
      • 8.3.3 Total Utility
    • 8.4 Forms of Utility
    • 8.5 Features of Utility
    • 8.6 Approaches to Consumer Behaviour
      • 8.6.1 Law of Diminishing Marginal Utility
      • 8.6.2 Consumer’s Equilibrium
      • 8.6.3 Law of Equi-marginal Utility
    • 8.7 Marshall’s Consumer Surplus
    • 8.8 Criticism of Utility Analysis of Demand/Defects of Cardinal Analysis
    • Review Questions
  • Chapter 9 Indifference Curve / Ordinal Utility Analysis
    • 9.1 Introduction
    • 9.2 Meaning of Indifference Curve
    • 9.3 Approach to Indifference Curve Analysis
      • 9.3.1 Scale of Preference
      • 9.3.2 Assumption of IC Analysis
      • 9.3.3 Indifference Schedule, Curves and Map
    • 9.4 Characteristic Features/Properties of Indifference Curve
    • 9.5 Significance/Usefulness and Importance of IC Analysis
    • 9.6 Marshallian Utility Analysis vs IC Analysis
    • 9.7 Superiority/Differences of IC Analysis [Over Marshallian Utility Analysis]
    • 9.8 Critical Evaluation of IC Analysis
    • 9.9 Marginal Rate of Substitution
      • 9.9.1 Differences between MRS and DMU
    • 9.10 Budget Line and Consumer’s Equilibrium
    • 9.11 Consumer’s Equilibrium
    • 9.12 Elasticity of Substitution [ES]
    • Review Questions
  • Chapter 10 Theory of Production
    • 10.1 Introduction
    • 10.2 Factors of Production
      • 10.2.1 Land
      • 10.2.2 Labour
      • 10.2.3 Capital
      • 10.2.4 Entrepreneur/Organisation
    • 10.3 Production Function
      • 10.3.1 Features of Production Function
      • 10.3.2 Assumptions of Production Function
      • 10.3.3 Production Function Table
      • 10.3.4 Uses of Production Function in Decision-Making
    • 10.4 Law of Variable Proportions (Production Function With One Variable Factor)
      • 10.4.1 Assumptions of the Law
      • 10.4.2 Three Stages of the Law
    • 10.5 Law of Returns to Scale
      • 10.5.1 Three Stages of Law of Returns to Scale
    • 10.6 Difference between Laws of Variable Proportions and Returns to Scale
    • 10.7 Producer’s Equilibrium
      • 10.7.1 Least Cost Combination Principle [Optimum Combination]
      • 10.7.2 Limitations of the Principle of Least Cost Combination
    • 10.8 Economies of Scale
      • 10.8.1 Internal Economies
      • 10.8.2 External Economies
      • 10.8.3 Internal Diseconomies
      • 10.8.4 External Diseconomies
      • 10.8.5 Significance of Economies of Scale
    • 10.9 Small-scale Production
    • 10.10 Iso-quant Analysis
      • 10.10.1 Shift of Iso-quants
      • 10.10.2 Difference between IC and Iso-quant
      • 10.10.3 Properties of Iso-quants
      • 10.10.4 Principles of Diminishing Marginal Rate of Technical Substitution
      • 10.10.5 Types of Iso-quants
    • 10.11 Production Function Theories
      • 10.11.1 Cobb-Douglas’ Production Function
      • 10.11.2 Constant Elasticity of Substitution [CES] Production Function
      • 10.11.3 Leontief Production Function
    • Review Questions
  • Chapter 11 Cost and Revenue
    • 11.1 Introduction
    • 11.2 Cost Concepts
      • 11.2.1 Opportunity Cost vs. Outlay Cost
      • 11.2.2 Explicit Cost vs. Implicit Cost
      • 11.2.3 Fixed Cost vs. Variable Cost
      • 11.2.4 Direct Cost vs. Indirect Cost
      • 11.2.5 Accounting Cost vs. Economic Cost
      • 11.2.6 Past Cost and Future Cost
      • 11.2.7 Out-of-Pocket Cost and Book Cost
      • 11.2.8 Incremental Cost and Sunk Cost
      • 11.2.9 Shutdown Cost and Abandonment Cost
      • 11.2.10 Replacement Cost and Historical Cost
      • 11.2.11 Private Cost and Social Cost
      • 11.2.12 Short-run Cost and Long-run Cost
    • 11.3 Cost–Output Relations
    • 11.4 Short-Run Cost Curves
      • 11.4.1 Total Cost
      • 11.4.2 Average Cost
      • 11.4.3 Marginal Cost
      • 11.4.4 Relationship between AC and MC
    • 11.5 Long-Run Cost Curves
      • 11.5.1 Long-run Total Cost [LTC]
      • 11.5.2 Long-run Average Cost [LAC]
      • 11.5.3 Relationship between LAC and SAC
      • 11.5.4 Long-run Marginal Cost [LMC]
    • 11.6 Concept of Revenue
      • 11.6.1 Total Revenue [TR]
      • 11.6.2 Average Revenue [AR]
      • 11.6.3 Marginal Revenue [MR]
    • 11.7 Behavioural Principles
      • 11.7.1 Revenue Curves of the Firm under Perfect Competition
      • 11.7.2 Revenue Curves of the Firm under Imperfect Competition
    • 11.8 Break-Even Analysis
      • 11.8.1 BEP in Terms of Physical Units
      • 11.8.2 BEP in Terms of Sales Value
      • 11.8.3 Uses of BEA
      • 11.8.4 Reasons for Popularity of BEA
      • 11.8.5 Limitations of BEA
    • 11.9 Cost Control
      • 11.9.1 Meaning
      • 11.9.2 Techniques of Cost Control/Reduction
      • 11.9.3 Factors Hindering Cost Control in India
    • Review Questions
  • Chapter 12 Market Structure
    • 12.1 Introduction and Meaning
    • 12.2 Extent of Market
    • 12.3 Value and Price
    • 12.4 Classification of Markets
      • 12.4.1 On the Basis of Size
      • 12.4.2 On the Basis of Time
      • 12.4.3 On the Basis of Situation [Relationship/Competition]
    • 12.5 Competition
      • 12.5.1 Perfect Competition
      • 12.5.2 Monopoly and Discriminating Monopoly
    • 12.6 Imperfect Competition
      • 12.6.1 Monopolistic Competition
      • 12.6.2 Oligopoly
      • 12.6.3 Duopoly
    • 12.7 Comparison of Different Market Structure
    • Review Questions
  • Chapter 13 Price Policy and Pricing Methods
    • 13.1 Introduction
    • 13.2 Pricing Policy
    • 13.3 Objectives of Pricing Policy
    • 13.4 Importance of Price Policy
    • 13.5 Factors Affecting Pricing Policy
    • 13.6 Principles of Price Policy
    • 13.7 Pricing Methods
      • 13.7.1 Cost-oriented Methods
      • 13.7.2 Competition-oriented Methods
      • 13.7.3 Other Methods
    • 13.8 Public Utilities
      • 13.8.1 Characteristics of Public Utilities
      • 13.8.2 Pricing Methods in Public Utility
    • Review Questions
  • Chapter 14 Price Determination under Perfect Competition
    • 14.1 Introduction
    • 14.2 Equilibrium between Demand and Supply Price
    • 14.3 Changes in Equilibrium
    • 14.4 Equilibrium Price of Firm and Industry
    • 14.5 Time Element in Price Determination
      • 14.5.1 Market Period
      • 14.5.2 Short Period
      • 14.5.3 Long Run
      • 14.5.4 Secular Period
    • 14.6 Market Period Price Determination
      • 14.6.1 Perishable Goods
      • 14.6.2 Durable Goods
    • 14.7 Short Period Price Determinations
    • 14.8 Determination of Long Period Price
    • 14.9 Conclusion
    • Review Questions
  • Chapter 15 Price Determination under Monopoly
    • 15.1 Introduction
    • 15.2 Kinds of Monopoly
      • 15.2.1 Private and Public Monopolies
      • 15.2.2 Pure Monopoly
      • 15.2.3 Simple Monopoly
      • 15.2.4 Discriminating Monopoly
    • 15.3 Nature of Demand, Revenue and Cost under Monopoly
      • 15.3.1 Costs under Monopoly
    • 15.4 Monopoly Power
    • 15.5 Determination of Price in Monopoly
    • 15.6 Price Discrimination
      • 15.6.1 Conditions for Price Discrimination
      • 15.6.2 Types of Discriminating Monopoly
    • 15.7 Degrees of Price Discrimination
      • 15.7.1 Price Discrimination of First Degree
      • 15.7.2 Price Discrimination of Second Degree
      • 15.7.3 Price Discrimination of Third Degree
    • 15.8 When Price Discrimination is Profitable
    • 15.9 When Price Discrimination is Possible
    • Review Questions
  • Chapter 16 Price Determination under Imperfect Competition
    • 16.1 Introduction
    • 16.2 Nature of Demand and Cost in Monopolistic Competition
      • 16.2.1 Demand Curve
      • 16.2.2 Cost Curve
    • 16.3 Price Determination in Monopolistic Competition
    • 16.4 Equilibrium of the Firm in Monopolistic Competition
      • 16.4.1 Short-run Equilibrium
      • 16.4.2 Long-run Equilibrium
    • 16.5 Group Equilibrium in Monopolistic Competition
    • 16.6 Price Determination in Oligopoly
    • 16.7 Sweezy’s “Kinked-Demand” Curve—Pricing in Oligopoly
      • 16.7.1 Assumptions
      • 16.7.2 Explanation
    • 16.8 Price Determination in Duopoly
      • 16.8.1 Cournot’s Duopoly Model
    • Review Questions
  • Question Papers
  • Index
Dr. T. Aryamala is Associate Professor of Economics, (Coordinator, Shift II), Asan Memorial College of Arts and Science, Chennai. She has over 25 years of teaching experience. Her areas of specialisation include International Trade and International Economics, Managerial Economics and Indian Economy.
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This book Essentials of Business Economics is comprehensive, clear, simple, and student-friendly. It is designed as an essential textbook for students of B.Com, B.B.A. and B.A. courses of Madras university.

Table of contents
  • Cover
  • Title Page
  • Copyright Page
  • Dedication
  • Contents
  • Preface
  • Chapter 1 Introduction to Economics
    • 1.1 Introduction
    • 1.2 Definition of Economics
      • 1.2.1 Wealth Definition: Adam Smith
      • 1.2.2 Welfare Definition: Alfred Marshall
      • 1.2.3 Scarcity Definition: Lionel Robbins
      • 1.2.4 Growth Definition: Paul A Samuelson
    • 1.3 Scope of Economics
      • 1.3.1 Consumption
      • 1.3.2 Production
      • 1.3.3 Exchange
      • 1.3.4 Distribution
      • 1.3.5 Public Finance
    • 1.4 Importance and Significance of the Study of Economics
    • 1.5 Nature of Economics: an Art or Science?
      • 1.5.1 Economics as a Science
      • 1.5.2 Economics as an Art
      • 1.5.3 Economics Both a Science and an Art
    • 1.6 Economics – A Positive or a Normative Science
      • 1.6.1 Economics as a Positive Science
      • 1.6.2 Economics as a Normative Science
      • 1.6.3 Interdependence of Positive and Normative Science
    • 1.7 Methods: Micro and Macro
      • 1.7.1 Microeconomics
      • 1.7.2 Macroeconomics
      • 1.7.3 Interdependence of Micro and Macroeconomics
    • 1.8 Methods of [Constructing an Economic Theory] Economic Analysis
      • 1.8.1 Deductive Method [From General to Particular]
      • 1.8.2 Inductive Method [From Particular to General]
      • 1.8.3 Interdependence of Deductive and Inductive Methods
    • 1.9 Basic Economic Problems
      • 1.9.1 What Goods to be Produced and in What Quantities?
      • 1.9.2 How to Produce?
      • 1.9.3 For Whom to Produce?
      • 1.9.4 Economic Growth
    • 1.10 Economic Systems
      • 1.10.1 Capitalist Economy
      • 1.10.2 Socialist Economy
      • 1.10.3 Mixed Economy
    • Review Questions
  • Chapter 2 Introduction to Business Economics
    • 2.1 Introduction
    • 2.2 Definition of Business Economics
      • 2.2.1 General Economic Theory and Business Economics - A Comparison
    • 2.3 Nature and Scope of Business Economics
      • 2.3.1 Business Decisions
      • 2.3.2 Scope of Business Economics
    • 2.4 Relationship of Business Economics and Other Disciplines
      • 2.4.1 Business Economics and Economics
      • 2.4.2 Business Economics and Operation Research
      • 2.4.3 Business Economics and Accounting
      • 2.4.4 Business Economics and Mathematics
      • 2.4.5 Business Economics and Statistics
      • 2.4.6 Business Economics and Theory of Decision Making
      • 2.4.7 Business Economics and Computer Science
    • 2.5 Objectives of a Business Firm
      • 2.5.1 Profit Maximisation as an Objective of a Firm
      • 2.5.2 Sales Maximisation Goal
      • 2.5.3 Maximise the Rate of Growth Goal
      • 2.5.4 Welfare Goals
      • 2.5.5 Multi-Goals of a Modern Firm
      • 2.5.6 Long-term Objectives of Firms
    • 2.6 Decision Making in Business
    • 2.7 Economic Concepts in Business Application
      • 2.7.1 Production Possibility Frontiers
      • 2.7.2 Accounting Profit and Economic Profit
      • 2.7.3 The Opportunity Cost Principle
      • 2.7.4 Marginal Opportunity Cost
      • 2.7.5 Incremental Principle
      • 2.7.6 Principle of Time Perspective
      • 2.7.7 The Discounting Principles
      • 2.7.8 The Equi-Marginal Principle
      • 2.7.9 Concept of Efficiency
      • 2.7.10 Incrementalism and Marginalism
    • 2.8 Case Study Method
    • Review Questions
  • Chapter 3 Business Cycle
    • 3.1 Introduction
    • 3.2 Meaning
    • 3.3 Definition
    • 3.4 Features / Characteristics of a Business Cycle
      • 3.4.1 Cyclical Fluctuations
    • 3.5 Phases of Business Cycles
      • 3.5.1 Boom or Prosperity
      • 3.5.2 Recession
      • 3.5.3 Depression
      • 3.5.4 Recovery
      • 3.5.5 Inflation
      • 3.5.6 Deflation
      • 3.5.7 Reflation
    • 3.6 Causes of Business Cycle
      • 3.6.1 Internal Factors
      • 3.6.2 External Factors
    • 3.7 Consequences / Effects of Business Cycles
    • 3.8 Measures to Minimise the Effects of Cycles
      • 3.8.1 Preventive Measures
      • 3.8.2 Relief Measures
    • Review Questions
  • Chapter 4 Demand Analysis
    • 4.1 Introduction
    • 4.2 Meaning and Definition of Demand
    • 4.3 Features of Demand
    • 4.4 Demand Schedules and Demand Curves
      • 4.4.1 Individual Demand Schedule
      • 4.4.2 Market Demand Schedule
    • 4.5 Determinants of Demand/Factors Affecting Demand
    • 4.6 Law of Demand
      • 4.6.1 Definitions
      • 4.6.2 Assumption
      • 4.6.3 Explanation of the Law
    • 4.7 Reasons Behind Downward Slope of the Demand Curve
    • 4.8 Exceptions to the Law of Demand
    • 4.9 Movement: Expansion or Contraction of Demand
    • 4.10 Shift in the Demand Curve
    • 4.11 Types of Demand
      • 4.11.1 Price Demand
      • 4.11.2 Income Demand [Normal Goods]
      • 4.11.3 Cross-Demand
    • 4.12 Demand Distinction
      • 4.12.1 Producer’s Goods and Consumer’s Goods
      • 4.12.2 Durable and Non-durable Goods
      • 4.12.3 Derived Demand and Autonomous Demand
      • 4.12.4 Industry Demand and Company Demand
      • 4.12.5 Short-run and Long-run Demand
      • 4.12.6 Joint and Rival/Composite Demand
      • 4.12.7 Individual Demand and Market Demand
    • Review Questions
  • Chapter 5 Elasticity of Demand
    • 5.1 Meaning and Definition
    • 5.2 Determinants of Price Elasticity of Demand
    • 5.3 Importance of Elasticity of Demand
    • 5.4 Types of Elasticity of Demand
      • 5.4.1 Price Elasticity of Demand
      • 5.4.2 Income Elasticity of Demand
      • 5.4.3 Cross-elasticity of Demand
    • 5.5 Measurement of Elasticity of Demand
      • 5.5.1 Total Expenditure Method
      • 5.5.2 Percentage or Proportionate Method
      • 5.5.3 Geometric or Point Method
      • 5.5.4 Arc Elasticity of Demand
      • 5.5.5 Revenue Method
    • 5.6 Advertising and Demand
      • 5.6.1 Advertising Elasticity of Demand
      • 5.6.2 Another Formula
      • 5.6.3 Factors Affecting Advertising Elasticity of Demand
      • 5.6.4 Methods of Advertisement Outlays
      • 5.6.5 Role of Advertising
    • Review Questions
  • Chapter 6 Demand Forecasting
    • 6.1 Introduction and Meaning
    • 6.2 Objectives of Demand Forecasting
      • 6.2.1 Short-term Objectives
      • 6.2.2 Long-term Objectives
    • 6.3 Types of Forecasting
      • 6.3.1 Micro Level or at the Level of Firm
      • 6.3.2 Industry Level
      • 6.3.3 Macroeconomic Forecasting
      • 6.3.4 Short-term Demand Forecasting
      • 6.3.5 Long-term Demand Forecasting
      • 6.3.6 Medium-term Demand Forecasting
    • 6.4 Requirements for Demand Forecasting
      • 6.4.1 Elements Connected to Consumers
      • 6.4.2 Elements Concerning the Suppliers
      • 6.4.3 Elements Concerning the Market / Industry
      • 6.4.4 Miscellaneous Elements
    • 6.5 Approach to Forecast
    • 6.6 Methods of Demand Forecasting
      • 6.6.1 Survey or Opinion Method
      • 6.6.2 Statistical Methods
    • 6.7 Features of a Good Forecasting Method
    • 6.8 Forecasting Demand for New Products
    • Review Questions
  • Chapter 7 Supply Function
    • 7.1 Meaning and Definition
    • 7.2 Distinction Between Supply and Stock
    • 7.3 Factors Determining Supply
    • 7.4 Supply Schedule and Curve
      • 7.4.1 Supply Schedule of an Individual Firm
      • 7.4.2 Market Supply Schedule
      • 7.4.3 Supply Curve of a Firm
    • 7.5 Law of Supply
    • 7.6 Movement: Expansion or Contraction of Supply
    • 7.7 Shift in Supply Curve
    • 7.8 Elasticity of Supply
    • 7.9 Types of Elasticity of Supply
    • 7.10 Measurement of Elasticity of Supply
      • 7.10.1 Percentage Method
      • 7.10.2 Point Elasticity vs. Arc Elasticity
      • 7.10.3 Diagrammatic Method
    • 7.11 Determinants of Elasticity of Supply
    • 7.12 Importance of Elasticity of Supply
    • 7.13 Equilibrium of the Firm or Profit Maximisation
    • Review Questions
  • Chapter 8 Theory of Consumer’s Behaviour (Utility Analysis of Demand)
    • 8.1 Introduction
    • 8.2 Meaning and Measurement of Utility
      • 8.2.1 Measurement of Utility
    • 8.3 Concepts of Utility
      • 8.3.1 Initial Utility
      • 8.3.2 Marginal Utility
      • 8.3.3 Total Utility
    • 8.4 Forms of Utility
    • 8.5 Features of Utility
    • 8.6 Approaches to Consumer Behaviour
      • 8.6.1 Law of Diminishing Marginal Utility
      • 8.6.2 Consumer’s Equilibrium
      • 8.6.3 Law of Equi-marginal Utility
    • 8.7 Marshall’s Consumer Surplus
    • 8.8 Criticism of Utility Analysis of Demand/Defects of Cardinal Analysis
    • Review Questions
  • Chapter 9 Indifference Curve / Ordinal Utility Analysis
    • 9.1 Introduction
    • 9.2 Meaning of Indifference Curve
    • 9.3 Approach to Indifference Curve Analysis
      • 9.3.1 Scale of Preference
      • 9.3.2 Assumption of IC Analysis
      • 9.3.3 Indifference Schedule, Curves and Map
    • 9.4 Characteristic Features/Properties of Indifference Curve
    • 9.5 Significance/Usefulness and Importance of IC Analysis
    • 9.6 Marshallian Utility Analysis vs IC Analysis
    • 9.7 Superiority/Differences of IC Analysis [Over Marshallian Utility Analysis]
    • 9.8 Critical Evaluation of IC Analysis
    • 9.9 Marginal Rate of Substitution
      • 9.9.1 Differences between MRS and DMU
    • 9.10 Budget Line and Consumer’s Equilibrium
    • 9.11 Consumer’s Equilibrium
    • 9.12 Elasticity of Substitution [ES]
    • Review Questions
  • Chapter 10 Theory of Production
    • 10.1 Introduction
    • 10.2 Factors of Production
      • 10.2.1 Land
      • 10.2.2 Labour
      • 10.2.3 Capital
      • 10.2.4 Entrepreneur/Organisation
    • 10.3 Production Function
      • 10.3.1 Features of Production Function
      • 10.3.2 Assumptions of Production Function
      • 10.3.3 Production Function Table
      • 10.3.4 Uses of Production Function in Decision-Making
    • 10.4 Law of Variable Proportions (Production Function With One Variable Factor)
      • 10.4.1 Assumptions of the Law
      • 10.4.2 Three Stages of the Law
    • 10.5 Law of Returns to Scale
      • 10.5.1 Three Stages of Law of Returns to Scale
    • 10.6 Difference between Laws of Variable Proportions and Returns to Scale
    • 10.7 Producer’s Equilibrium
      • 10.7.1 Least Cost Combination Principle [Optimum Combination]
      • 10.7.2 Limitations of the Principle of Least Cost Combination
    • 10.8 Economies of Scale
      • 10.8.1 Internal Economies
      • 10.8.2 External Economies
      • 10.8.3 Internal Diseconomies
      • 10.8.4 External Diseconomies
      • 10.8.5 Significance of Economies of Scale
    • 10.9 Small-scale Production
    • 10.10 Iso-quant Analysis
      • 10.10.1 Shift of Iso-quants
      • 10.10.2 Difference between IC and Iso-quant
      • 10.10.3 Properties of Iso-quants
      • 10.10.4 Principles of Diminishing Marginal Rate of Technical Substitution
      • 10.10.5 Types of Iso-quants
    • 10.11 Production Function Theories
      • 10.11.1 Cobb-Douglas’ Production Function
      • 10.11.2 Constant Elasticity of Substitution [CES] Production Function
      • 10.11.3 Leontief Production Function
    • Review Questions
  • Chapter 11 Cost and Revenue
    • 11.1 Introduction
    • 11.2 Cost Concepts
      • 11.2.1 Opportunity Cost vs. Outlay Cost
      • 11.2.2 Explicit Cost vs. Implicit Cost
      • 11.2.3 Fixed Cost vs. Variable Cost
      • 11.2.4 Direct Cost vs. Indirect Cost
      • 11.2.5 Accounting Cost vs. Economic Cost
      • 11.2.6 Past Cost and Future Cost
      • 11.2.7 Out-of-Pocket Cost and Book Cost
      • 11.2.8 Incremental Cost and Sunk Cost
      • 11.2.9 Shutdown Cost and Abandonment Cost
      • 11.2.10 Replacement Cost and Historical Cost
      • 11.2.11 Private Cost and Social Cost
      • 11.2.12 Short-run Cost and Long-run Cost
    • 11.3 Cost–Output Relations
    • 11.4 Short-Run Cost Curves
      • 11.4.1 Total Cost
      • 11.4.2 Average Cost
      • 11.4.3 Marginal Cost
      • 11.4.4 Relationship between AC and MC
    • 11.5 Long-Run Cost Curves
      • 11.5.1 Long-run Total Cost [LTC]
      • 11.5.2 Long-run Average Cost [LAC]
      • 11.5.3 Relationship between LAC and SAC
      • 11.5.4 Long-run Marginal Cost [LMC]
    • 11.6 Concept of Revenue
      • 11.6.1 Total Revenue [TR]
      • 11.6.2 Average Revenue [AR]
      • 11.6.3 Marginal Revenue [MR]
    • 11.7 Behavioural Principles
      • 11.7.1 Revenue Curves of the Firm under Perfect Competition
      • 11.7.2 Revenue Curves of the Firm under Imperfect Competition
    • 11.8 Break-Even Analysis
      • 11.8.1 BEP in Terms of Physical Units
      • 11.8.2 BEP in Terms of Sales Value
      • 11.8.3 Uses of BEA
      • 11.8.4 Reasons for Popularity of BEA
      • 11.8.5 Limitations of BEA
    • 11.9 Cost Control
      • 11.9.1 Meaning
      • 11.9.2 Techniques of Cost Control/Reduction
      • 11.9.3 Factors Hindering Cost Control in India
    • Review Questions
  • Chapter 12 Market Structure
    • 12.1 Introduction and Meaning
    • 12.2 Extent of Market
    • 12.3 Value and Price
    • 12.4 Classification of Markets
      • 12.4.1 On the Basis of Size
      • 12.4.2 On the Basis of Time
      • 12.4.3 On the Basis of Situation [Relationship/Competition]
    • 12.5 Competition
      • 12.5.1 Perfect Competition
      • 12.5.2 Monopoly and Discriminating Monopoly
    • 12.6 Imperfect Competition
      • 12.6.1 Monopolistic Competition
      • 12.6.2 Oligopoly
      • 12.6.3 Duopoly
    • 12.7 Comparison of Different Market Structure
    • Review Questions
  • Chapter 13 Price Policy and Pricing Methods
    • 13.1 Introduction
    • 13.2 Pricing Policy
    • 13.3 Objectives of Pricing Policy
    • 13.4 Importance of Price Policy
    • 13.5 Factors Affecting Pricing Policy
    • 13.6 Principles of Price Policy
    • 13.7 Pricing Methods
      • 13.7.1 Cost-oriented Methods
      • 13.7.2 Competition-oriented Methods
      • 13.7.3 Other Methods
    • 13.8 Public Utilities
      • 13.8.1 Characteristics of Public Utilities
      • 13.8.2 Pricing Methods in Public Utility
    • Review Questions
  • Chapter 14 Price Determination under Perfect Competition
    • 14.1 Introduction
    • 14.2 Equilibrium between Demand and Supply Price
    • 14.3 Changes in Equilibrium
    • 14.4 Equilibrium Price of Firm and Industry
    • 14.5 Time Element in Price Determination
      • 14.5.1 Market Period
      • 14.5.2 Short Period
      • 14.5.3 Long Run
      • 14.5.4 Secular Period
    • 14.6 Market Period Price Determination
      • 14.6.1 Perishable Goods
      • 14.6.2 Durable Goods
    • 14.7 Short Period Price Determinations
    • 14.8 Determination of Long Period Price
    • 14.9 Conclusion
    • Review Questions
  • Chapter 15 Price Determination under Monopoly
    • 15.1 Introduction
    • 15.2 Kinds of Monopoly
      • 15.2.1 Private and Public Monopolies
      • 15.2.2 Pure Monopoly
      • 15.2.3 Simple Monopoly
      • 15.2.4 Discriminating Monopoly
    • 15.3 Nature of Demand, Revenue and Cost under Monopoly
      • 15.3.1 Costs under Monopoly
    • 15.4 Monopoly Power
    • 15.5 Determination of Price in Monopoly
    • 15.6 Price Discrimination
      • 15.6.1 Conditions for Price Discrimination
      • 15.6.2 Types of Discriminating Monopoly
    • 15.7 Degrees of Price Discrimination
      • 15.7.1 Price Discrimination of First Degree
      • 15.7.2 Price Discrimination of Second Degree
      • 15.7.3 Price Discrimination of Third Degree
    • 15.8 When Price Discrimination is Profitable
    • 15.9 When Price Discrimination is Possible
    • Review Questions
  • Chapter 16 Price Determination under Imperfect Competition
    • 16.1 Introduction
    • 16.2 Nature of Demand and Cost in Monopolistic Competition
      • 16.2.1 Demand Curve
      • 16.2.2 Cost Curve
    • 16.3 Price Determination in Monopolistic Competition
    • 16.4 Equilibrium of the Firm in Monopolistic Competition
      • 16.4.1 Short-run Equilibrium
      • 16.4.2 Long-run Equilibrium
    • 16.5 Group Equilibrium in Monopolistic Competition
    • 16.6 Price Determination in Oligopoly
    • 16.7 Sweezy’s “Kinked-Demand” Curve—Pricing in Oligopoly
      • 16.7.1 Assumptions
      • 16.7.2 Explanation
    • 16.8 Price Determination in Duopoly
      • 16.8.1 Cournot’s Duopoly Model
    • Review Questions
  • Question Papers
  • Index
Biographical note
Dr. T. Aryamala is Associate Professor of Economics, (Coordinator, Shift II), Asan Memorial College of Arts and Science, Chennai. She has over 25 years of teaching experience. Her areas of specialisation include International Trade and International Economics, Managerial Economics and Indian Economy.
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