Economics of Strategy

School of Business Management, NMIMS University Term: II Executive MBA (E-MBA)

Objective: the paper aims at providing the students with an understanding of some of the microeconomic principles that help managers formulate certain essential strategy pertaining to an individual firm.

Mode of Evaluation (%)

Class participation: Assignment (group work): Quiz: End Term Exam: 25

10 25

40

Session outline Session 1 Introduction to basic framework of demand and supply, price determination and partial equilibrium analysis.

Session 2

The optimal choice for input employment for a firm, one and two factor production function, iso-quant and returns to scale.

Session 3

Understanding economic concepts of cost of production, cost curves in the short and in long run, economics of scale, economies of scope

Session 4

Equilibrium for the firm, the profit maximization hypothesis, alternative objectives for a firm. Equilibrium in a perfectly competitive market.

Session 5

Firms with market power, monopoly and pricing strategy, price discrimination. Oligopoly and strategic interaction, game theory and its implications in an oligopoly.

Main text book : Introduction to Industrial Organization by Luis M.B. Cabral , PHI Learning Private limited Reference book : (i) Microeconomics by Pindyck and Rubinfeld (ii) Economics of Strategy by Besanko, Dranove and Shanley

Prepared by

Faculty Recommended by Area Chairperson/ Prog. Chairperson

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Approved By Dean SBM

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