MFA 105 Managerial Economics Notes for GGSIPU MBA (Financial Analysis) Sem 1

Written by Prateek Talwar, Founder, Unnati Educations, ACS (ICSI) · Reviewed by Sheetal Kirola, Academic Head, M.Ed. (academic review) · Checked against MBA (FA) Scheme and Syllabus 2021-22 onwards, nt0722536 (9).pdf · Updated 28 October 2026 · Editorial policy

Scheme: MBA (Financial Analysis) Scheme and Syllabus, 2021-22 onwards (Approved by AC Sub Committee) | Applies to: 2021-22 academic session onwards | Verified against: nt0722536 (9).pdf on ipu.ac.in, 28 October 2026

MFA-105 Managerial Economics at a glance: GGSIPU MBA (Financial Analysis) Sem 1 credits, units and exam pattern

Managerial Economics is a core first-semester paper of the GGSIPU MBA (Financial Analysis) programme, with Unit I given the most teaching hours.

No paper-setter instructions are printed for MFA-105. Evaluation and re-appear rules are in GGSIPU Ordinance 11.

MFA-105 is taught alongside nine other papers listed on the GGSIPU MBA (FA) Semester 1 papers page.

MFA-105 Managerial Economics Notes unit-wise: 29 diagrams, 8 worked examples and 110 exam questions across 4 units

Each unit ends with a Quick Revision Table and a question set. Notes for the other papers are on the GGSIPU MBA (FA) notes page.

MFA-105 Unit 1: Introduction

Also covered as "Introduction to Managerial Economics", pages 3 to 23. It defines the subject, sets out nature and scope (p3), links it with statistics, accounting and OR (p5) and lists Baumol's duties of a managerial economist (p7). Consumer behaviour runs from cardinal and ordinal approaches (p11) and the equi-marginal principle (p14) to indifference curves and consumer equilibrium (p17).

Counts: 7 figures, 2 worked examples, 27 exam questions.

MFA-105 Unit 2: Demand Analysis and Theory of Production

Pages 24 to 43. Demand starts from the demand function (p24), then measures elasticity by the percentage, total outlay, point and arc methods (p27). Forecasting covers Delphi, barometric and trend methods (p30). Production moves from Cobb-Douglas (p33) and the three stages of variable proportions (p35) to returns to scale (p37) and the least-cost input combination (p38).

Counts: 8 figures, 4 worked examples, 1 numerical quick solution, 28 exam questions.

MFA-105 Unit 3: Theory of Cost and Market Structures

Pages 44 to 60. Cost concepts (p44) lead to short-run curves and the AC-MC relation (p45), then Viner's envelope LAC (p47). Price-output decisions cover perfect competition (p51), monopoly and price discrimination (p52), monopolistic competition (p54) and oligopoly with Sweezy's kinked demand curve (p56).

Counts: 9 figures, 1 worked example, 1 numerical quick solution, 28 exam questions.

MFA-105 Unit 4: Introduction to Macro Economics

Pages 61 to 81, from the firm to the economy: micro versus macro (p61), market, command and mixed economies (p63), the invisible hand and market failure (p66) and the government's role (p67). It closes with growth and HDI (p68), money supply and the MPC (p71), inflation (p74) and interest-rate theories (p78).

Counts: 5 figures, 1 worked example, 27 exam questions.

Quick look: nominal to real interest (from page 78)

1. Nominal rate: a bank FD at 7%.
2. Subtract expected inflation of 5% (Fisher, approximate).
3. Real return is about 2%; at 8% inflation it is about −1%.

Opportunity cost and economic profit for a firm: excerpt from page 9 of the MFA-105 notes

Excerpt from page 9 (Unit I, Topic 04), rewritten for the web.

Definition

The opportunity cost of a decision is the value of the next best alternative that is given up when a choice is made. It is not the value of every alternative, only the best one that was sacrificed.

Two working formulas

Opportunity cost = return from the next best alternative foregone. Economic profit = total revenue − (explicit cost + implicit or opportunity cost).

Three quick cases

• A person leaves a job paying ₹8 lakh a year to start a business. The opportunity cost of his time is ₹8 lakh a year.
• A firm runs a factory in its own building instead of renting it out at ₹50,000 a month. The opportunity cost of using the building is ₹50,000 a month.
• A firm puts ₹10 lakh of its own money into a project instead of a 7% bank FD. The opportunity cost is ₹70,000 a year.

Features

• It exists because resources are scarce and have alternative uses.
• It is often an implicit cost, so it never appears in the accounting books.
• If a resource has no alternative use, such as a specialised machine with no resale value, its opportunity cost is zero.
• It is the basis of economic profit, as against accounting profit.

Why managers use it

A project is worth taking only if its return beats the opportunity cost. The same idea sits behind normal profit, the cost of capital in capital budgeting, and make-or-buy, lease-or-buy and pricing decisions.

How to write MFA-105 answers: definitions, labelled diagrams and five-mark distinction tables

MFA-105 rewards structure over length. The book's tip for a ten-mark "nature and scope" answer is a good template: three or four definitions, seven or eight features with one line each, scope under two heads (internal and external), then a short conclusion on importance.

Draw before you explain. The notes carry 29 numbered figures, from the TU and MU curves (Figure 1.1) to the liquidity preference diagram (Figure 4.5). A monopoly answer is built around Figure 3.7: output where MR = MC, price read from the AR curve. Label axes, curves and the equilibrium point.

Use a table for every "distinguish". Thirteen of the 40 five-mark questions ask you to distinguish two ideas or explain how they relate. The notes answer these with basis-wise tables, such as marginal vs incremental concept (page 10) and short-run vs long-run cost (page 49). Five or six rows are enough.

Name the elasticity. For applications of demand analysis, the notes advise naming the elasticity used (price, income, cross or advertising) and adding one Indian example per point.

Close with the business use. Most topics in the notes end with a significance or managerial-applications list; two lines from it make a strong conclusion.

Worked example (page 10). A firm with spare capacity gets a special order of 1,000 units at ₹80. Average cost is ₹90 (₹30 fixed + ₹60 variable), so the order looks like a loss.

Incremental revenue = 1,000 × 80 = ₹80,000. Incremental cost is only the variable cost, 1,000 × 60 = ₹60,000, because fixed cost is paid anyway. Incremental profit = ₹20,000, so accept. Write the formula, both figures and the decision in one sentence.

Practise this structure on the GGSIPU MBA (FA) important questions.

MFA-105 exam corner: 38 ten-to-fifteen-mark, 40 five-mark and 32 two-mark questions by unit

Exam-style questions, answered through the topic notes. One per unit:

• Unit I, 5 Marks: Explain the diamond-water paradox using marginal utility. Pointer: water has high TU but low MU; diamonds the reverse, and price follows MU (page 15).
• Unit II, 2 Marks: Price falls from ₹10 to ₹8 and quantity rises from 50 to 60; find Ed. Pointer: 20% ÷ 20% = 1, unitary (page 43).
• Unit III, 2 Marks: Find BEP if FC = ₹60,000, P = ₹25, AVC = ₹15. Pointer: contribution ₹10, so 6,000 units (page 60).
• Unit IV, 5 Marks: Explain Musgrave's three functions of government. Pointer: allocation, distribution and stabilisation, each with one tool (page 67).

The MFA-105 notes list 38 ten-to-fifteen-mark, 40 five-mark and 32 two-mark exam questions across 4 units, plus 8 worked examples and 2 numerical quick solutions.

More practice will sit in the MFA-105 important questions.

MFA-105 and the GGSIPU MBA (Financial Analysis) Sem 1 papers it connects to

MFA-105 has no paired lab; credits and electives for every semester are on the GGSIPU MBA (FA) syllabus page.

• Unit III cost concepts and break-even → MFA-101 Accounting for Management (Unit II: classification of cost, cost sheet).
• Unit II least-squares and regression forecasting → MFA-103 Quantitative Techniques (Unit I: OLS regression).
• Unit IV money supply and RBI → MFA-111 Financial Markets and Institutions (Unit II: role of RBI, monetary policy).
• Unit IV real interest → MFA-109 Personal Finance, when comparing investment returns.

Read the GGSIPU MBA (FA) Sem 1 Managerial Economics notes next to MFA-101 and MFA-103. The other Semester 1 papers are MFA-107 Information Technology Management, MFA-113 Management Process and Organizational Behaviour, MFA-115 Legal aspects of Business, MFA-117 Communication in Organizations and MFA-119 Information Technology Management Lab.

In Semester 2, MFA-108 Macro and Mathematical Economics picks up where Unit IV ends.

Who writes and checks the MFA-105 Managerial Economics notes?

• Prateek Talwar, author. Founder, Unnati Educations; Associate Company Secretary (ACS), ICSI, membership no. 58704, since 15 May 2019; B.Com, University of Delhi (SOL), 2012. Profile
• Sheetal Kirola, academic reviewer. Academic Head, Unnati Educations; M.Ed.; 7 years of experience. Profile

The MFA-105 Managerial Economics IPU notes were mapped topic by topic to the MBA (FA) Scheme and Syllabus 2021-22 onwards. The 2026-27 edition has a Quick Revision Table in every unit. Last updated 28 October 2026 under our editorial policy.

The same team prepares GGSIPU important questions for each course we cover.

Do the MFA-105 notes cover the full GGSIPU syllabus?

Yes. Every official MFA-105 topic has its own section in the notes.

Verify it: GGSIPU MBA (Financial Analysis) Scheme and Syllabus, 2021-22 onwards (MFA-105 on PDF page 13, marks rule on page 4).

Every course in GGSIPU notes is mapped to its official PDF the same way.

MFA-105 Managerial Economics notes FAQs

How do I get the full MFA-105 notes?

Message 9899436384 on WhatsApp. The full MFA-105 notes come only as a printed book and are not available as a PDF. The team confirms your order and address on WhatsApp, and the book reaches you within a maximum of 5 to 7 days, depending on your location.

Do the MFA-105 notes follow the 2021-22 onwards MBA (FA) syllabus?

Yes. They follow the MBA (Financial Analysis) Scheme and Syllabus, 2021-22 onwards, published on ipu.ac.in. All four official units, Introduction, Demand Analysis and Theory of Production, Theory of Cost and Market Structures, and Introduction to Macro Economics, appear in the same order, and the syllabus map above shows where each topic sits in the book.

What is the passing mark for MFA-105 Managerial Economics?

MFA-105 is marked out of 100: 50 internal assessment and 50 in the end-term exam, as the MBA (FA) scheme states for all theory courses. The scheme PDF does not print a pass percentage, so we do not quote one. Minimum marks, results and re-appear rules come from GGSIPU Ordinance 11; confirm with your institute.

Which MFA-105 unit needs the most diagram practice?

Unit III. It holds 9 of the book's 29 figures in only 17 pages: short-run cost curves, the LAC envelope, revenue curves, and equilibrium under perfect competition, monopoly, monopolistic competition and the kinked demand curve. Unit II follows with 8 figures on demand, elasticity, production and isoquants. Practise each until you can label it without looking.

Are there numericals in MFA-105, and do the notes solve them?

MFA-105 is mainly a theory and diagram paper, but short numericals do appear. The notes work through 8 examples, including percentage and arc elasticity, a least-squares trend, input optimality, break-even and a special-order decision, and give quick solutions to the elasticity and break-even numericals in the Unit II and Unit III question sets. Practise those first.

Do the MFA-105 Unit IV notes include current RBI policy rates?

Yes. Unit IV lists RBI policy rates as they stood in October 2026, along with the MPC structure and the instruments of monetary policy. The MPC meets six times a year, so the notes advise checking the latest repo rate on the RBI website before your exam and writing that figure if a question asks for current rates.

Get the full MFA-105 Managerial Economics Notes on WhatsApp

The Managerial Economics notes in English come as one 81-page printed book, ordered in printed form only and not available as a PDF. Delivery takes a maximum of 5 to 7 days; the rest depends on your location.

Order the MFA-105 Managerial Economics Notes book on WhatsApp (4 units, 81 pages)

Unnati Educations is an independent education provider based in Vikaspuri, Delhi. We are not affiliated with, authorised by, or endorsed by Guru Gobind Singh Indraprastha University (GGSIPU). 'GGSIPU' and 'IPU' are used only to describe the syllabus our notes follow. For official information, visit ipu.ac.in.