Unit –I

Elasticity of Demand; Concept and measurement of Elasticity of Demand; Determinant of elasticity of demand; Importance of

elasticity of demand.

Unit –II

Production Function ; Law of variable Proportion; Iso-quant; Economics region and optimum factor combination ; Expansion path:

Return to Scale; Internal & External economics and diseconomies; ridge lines.

Theory of costs: Short run and long run curves – traditional and modern approaches.

Unit – III

Market Structure – I

Market Structure and Business Decision : Objective of a business firm.

a) Perfect Competition : Profit maximization and equilibrium of firm and industry; Short – run and long run supply curves; Price

and output determination.

b) Monopoly: Determination of price under monopoly; Equilibrium of a firm; Compression between perfect competition and

monopoly; Price discrimination.

Unit – IV

Market Structure – II

a) Monopolistic Competition ; Meaning and characteristics: Price and output determination under monopolistic competition;

Product Differentiation

b) Oligopoly : Characteristics indeterminate pricing and output; Classical models of oligopoly: Kinked demand curve

Unit – V

Factor Pricing – I : Marginal Productivity theory and demand for factor: Nature of supply of factors inputs: Determination of wage

rates under perfect competition and monopoly ; Exploitation of labour.

Factor Pricing – II : Rent concept, Recardian and modern theories of rent Quasireant Interests-concepts and theories of interest; Profit

nature, concepts and theories of profit.