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Managerial Economics - Cost Theory

In this free online course, learn about various cost theories and categories, and their role in managerial economics.

Publisher: NPTEL
What is the value of ‘costs’ in business decision-making? In this free online managerial economics course, you will get to grips with different aspects of cost theory including economies of scale, and short-run and long-run analyses. Studying the learning curve, the limits of the break-even analysis, and large-scale production will keep you engaged in the interesting and dynamic material.
Managerial Economics - Cost Theory
  • Duration

    4-5 Hours
  • Students

  • Accreditation






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In this course on cost theory, you will learn to distinguish between the various categories of production costs, along with how to conduct short-run and long-run analyses of them. The break-even analysis and economies of scale will be addressed. At first, you will be introduced to the costs used for accounting purposes and economic analyses. Fixed costs and variable costs will follow, along with the total average and the marginal cost of production.

Next, you will be taught about the contribution analysis and the profit-volume ratio (P/V ratio). Understanding the margin of safety is crucial to becoming successful in the business world. You will work through this concept, along with the learning curve theory (the effort to complete a task should take less time and effort the more the task is done over time - in other words, the workers should get faster the more they practice). The limits of the break-even analysis will also be addressed. You will then be taught how large-scale production results in lower unit cost and the accruing advantages of this system. By the end of this course, the various categories of economies of scale will be highlighted.

The material covers all aspects and sections of cost theories. It will be of great interest to commercial managers of large businesses, and students studying business economics, manufacturing or managerial economics in the commercial field sector will find it particularly interesting. If you start this course now, you can gain a better understanding and knowledge of cost theory today.

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