Mathematical Economics-II

Paper Code: 
25DECO 611A
Credits: 
06
Contact Hours: 
90.00
Max. Marks: 
100.00
Objective: 
  1. To understand the Price and Output Determination under monopoly and duopoly mathematically.
  2. To explain the concept of game theory and its application.
  3. To comprehend the techniques of input output analysis and linear programming.

 

Course Outcomes: 

Course Outcomes (COs):

Course

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies 

Course Code

Course Title

25DECO 611 A

Mathematical Economics-II

(Theory)

Students will:

CO103: mathematically analyze different aspects of monopoly

CO104: mathematically analyze behaviour of a firm under duopoly.

CO105: analyze fundamental principles of game theory and its application

CO106: analyze principles of input-output analysis and its application

CO107: analyze the principles of linear programming and its application

CO108: contribute effectively in course-specific interaction

Approach in teaching: Interactive Lectures and Discussions.

 

Learning activities for the students:

Practice Modules and

Assignments.

Class activity, Assignments and Semester end examinations.

 

18.00
Unit I: 
Monopoly
  • Monopoly – Characteristics
  • Equilibrium of simple monopoly - profit maximization
  • Sales revenue maximization by monopolist
  • Price discrimination: meaning, degrees and determination of price and output
  • Multi-Plant Monopolist

Effects of various taxes on output and price under monopoly

18.00
Unit II: 
Duopoly
  • Duopoly - Meaning and characteristics
  • Quasi competitive solution
  •  Collusion solution
  •  Cournot solution
  • Market share solution

 

 

18.00
Unit III: 
Game Theory
  • Basic concept, pay-off matrix.
  • Types of games –game of strategy and game of chance, two-person constant-sum and zero-sum games
  • Maximin, minimax and saddle point solution;
  • Dominant strategies
  • Pure and mixed strategies
  • Nash Equilibrium

 

18.00
Unit IV: 
Input-Output Analysis
  • Concept of ‘Open & Closed’, ‘Static & Dynamic’ Model
  • Assumptions of input-output model
  • Input-output transactions table and coefficient matrix
  • Determination of gross output in an open & static input-output model
  • Hawkins-Simon viability conditions 

 

18.00
Unit V: 
Linear Programming
  • Meaning, assumptions and ingredients of linear programming
  • Basic concepts of linear programming-feasible region, convex set, feasible solution, basic feasible solution and optimal solution
  • Formulation of linear programming problem and its graphical solution
  • Simplex Method (for maximization only)
  • Concept of Primal and Dual.

 

Essential Readings: 
  1. Henderson, J.M. and Quandt, R.E. Microeconomic Theory: A Mathematical Approach, McGraw Hill, 1980.
  2. Chiang, A. C., Wainwright, K., Fundamental Methods of Mathematical Economics  McGraw Hill, 4TH Edition, 2005.

 

References: 

Suggested Readings:

  1. Mehta, B.C. andMadnani, G.M.K., Mathematics for Economists, Sultan Chand & Sons.
  2. Mehta, B.C., Mathematical Economics: Microeconomic Models, Sultan Chand & Sons.

E Resources :

Linear Programming Solver Software

https://sourceforge.net/projects/lipside/

Journals:

 

Academic Session: 
2025-26
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