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Business Economics

Business Economics applies economic theories to address business challenges, focusing on micro and macroeconomic principles. Key topics include demand elasticity, consumer behavior, production costs, market structures, pricing strategies, national income, inflation, monetary and fiscal policies, and business cycles. Understanding these concepts is essential for effective decision-making in a business context.

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18 views1 page

Business Economics

Business Economics applies economic theories to address business challenges, focusing on micro and macroeconomic principles. Key topics include demand elasticity, consumer behavior, production costs, market structures, pricing strategies, national income, inflation, monetary and fiscal policies, and business cycles. Understanding these concepts is essential for effective decision-making in a business context.

Uploaded by

ishitachamoli03
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Business Economics

1. Introduction to Business Economics


Applies economic theories to solve business problems. Deals with micro and macroeconomic
principles in decision-making.

2. Demand and Elasticity


Law of demand: inverse relationship between price and quantity. Elasticity measures
responsiveness of demand to changes in price, income, etc.

3. Consumer Behavior and Utility Analysis


Consumers aim to maximize utility. Tools: indifference curves, budget lines, marginal rate of
substitution.

4. Production and Costs


Short-run vs. long-run production. Law of Variable Proportions and Returns to Scale. Cost
concepts: fixed, variable, marginal, average.

5. Market Structures
Types: Perfect competition, Monopoly, Monopolistic competition, and Oligopoly. Each has
different pricing and output implications.

6. Pricing Strategies
Firms use pricing techniques like skimming, penetration, bundle pricing based on elasticity,
competition, and product life cycle.

7. National Income and GDP


Measures the economic performance of a country. Methods: Income, Expenditure, and
Production.

8. Inflation and Deflation


Inflation reduces purchasing power; deflation causes stagnation. Managed through monetary
and fiscal policies.

9. Monetary and Fiscal Policy


Monetary policy (RBI): interest rates, money supply. Fiscal policy (Govt): taxes, spending,
borrowing.

10. Business Cycles


Phases: Expansion, Peak, Contraction, Trough. Impact business strategies and government
interventions.

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