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Microeconomics–II
Paper Code:
ECO 401
Credits:
3
Contact Hours:
45.00
Max. Marks:
100.00
Objective:
1. To help understand the various concepts of costs and revenue.
2. To explain the determination of price and output in different market structures - perfect competition, monopoly, monopolistic competition and oligopoly.
3. To acquaint the students with the theories of factor pricing.
9.00
Unit I:
Cost and Revenue
- Short- run cost curves and their relationship;
- Cost in the long- run: LAC and LMC;
- Economies and diseconomies of scale;
- Revenue: Total, average and marginal revenue and their relationships;
- Relationship between TR, MR, AR and elasticity.
9.00
Unit II:
Theory of Firm I
- Equilibrium of the firm: TR - TC approach and MR - MC approach;
- Perfect competition: Determination of price and output in the short and long run;
- Monopoly: Determination of price and output in the short and long run
9.00
Unit III:
Theory of Firm II
- Monopoly: Price discrimination, measure of monopoly power;
- Monopolistic competition: determination of price and output in the short- and longrun, excess capacity;
- Oligopoly: Basic concept of non-collusive and collusive oligopoly, Paul M. Sweezy model.
9.00
Unit IV:
Factor Pricing I
Marginal Productivity Theory of Distribution:
- Factor pricing in perfectly competitive markets;
- Factor pricing in imperfectly competitive markets.
Interest:
- Classical& Keynesian Theories.
9.00
Unit V:
Factor Pricing II
Rent:
- Ricardian theory of rent;
- Modern theory of rent;
- Quasi rent.
Profit:
- Innovation, risk and uncertainty theories.
Essential Readings:
Ahuja, H.L, Modern Microeconomics: Theory & Applications, S. Chand &Company, 19th Edition, 2022.
References:
1. Koutsoyiannis, A. Modern Microeconomics, Macmillan, 2nd Edition, 2020.
2. Varian, H.R., Intermediate Microeconomics: A Modern Approach, East-west Press, 8th Edition, 2010.
3. Stonier, A.W. and D.C. Hague., A Textbook of Economics Theory, ELBS and Longman Group, 5th Edition, 2003.
Academic Session:
