MANAGERIAL Prof – Yogesh Bhawani

ECONOMICS
 CEC 1 GROUP
PRESENTATION

TOPIC – A Study On Elasticity's On MBA

Institutes
 Table Of Content
• Brief Introduction of MBA Institute

• Emergence and history of MBA Institution

• Rise of the Demand of MBA Institute

• Why MBA IN INDIA REMAINS A SAFE BET AFTER COVID 19 PANDEMIC

• Demand Elasticity of MBA Institution

• Price Elasticity of Demand for MBA Institution

• Income Elasticity of MBA Institution

• Cross Elasticity of MBA Institute

BRIEF INTRODUCTION OF
MBA INSTITUTE
MBA Institute is a platform from where students can pursue their MBA degree. The
Master of Business Administration ( MBA) is an internationally recognized graduate
level degree that develops the skills for careers in business & management. The
value of the MBA however is not limited to the business world. MBA from an
recognized institution can also be useful for those pursuing a managerial career in
the private sector as well as government & non profit sectors.
 EMERGENCE AND HISTORY OF MBA
INSTITUTION
 The development of management as a formal discipline can be trace to the late
19th century.
 Harvard Business School launched the first master of business administration in 1908.
 Modern management education in India began in 1950s . The foundation was laid by
prime minister Jawaharlal Nehru whose vision was to create a talented workforce to
manage industrialization.
 In 1955 the University of Delhi was the first university under the Delhi school of
economics to start a 3 year part time PG Diploma program for working professions.
Initially short term program was started to impart management trainee then full
fledged program began whose pioneers were the Indian Institute of Social Wale fare
Kolkata & XLRI Jamshedpur.
RISE OF THE DEMAND OF MBA INSTITUTE
The decision to pursue an MBA is never an easy one . There is a significant outlay to
cover the cost of the program . On top of that the time spent in MBA means time
spend away from employment which translates to foregone income & other
investment .however if we talk about recent times the Covid 19 Pandemic has only
further fuled the uncertainty . The economic downturn has forced companies to
reassess their hiring plans while the business school have had to restructure how they
deliver the MBA experience . But despise all these the benefit of doing a MBA
continue to out way the potential drawbacks lets discuss a few reasons why MBA in
India remains a safe bet.
Demand of MBA Institution
500000
450000
400000
350000
300000
250000
200000
150000
100000
50000
0
2016-17 2017-18 2018-19 2019-20

Total Intake Total Enrollment Column1

WHY MBA IN INDIA REMAINS
A SAFE BET AFTER COVID 19
PANDEMIC
 The opportunity cost of not working is lower right now. With such a scenario
there has never been a better time to come out of the job market & invest in learning
& up skilling yourself without having to worry too much about the money not
earned or professional growth opportunities missed. Infect 39% of schools saw
significance increase of 21% or more in the number of MBA applicants.
 There will be opportunities abound when you graduate. Starting your MBA in
the next couple of years will likely mean that by the end of the 12 or 24 months
program you will be graduating into a very healthy economy & a strong job market.
By surveying of top recruiting companies it is found that the percentage which fell in
the middle of 2020 will grow to 89% in 2021 & by the strong growth trajectory for
country like India it is assume that hiring trends will continue to become better
beyond 2021.
WHY IS THERE AN INCREASE IN
DEMAND FOR MBA INSTITUTE ,
EVEN WHEN THE TUTION FEES IS
HIGH OR WHY MBA INSTITUTION IS
INELASTIC IN DEMAND?
PRICE OF DEMAND ELASTICITY OF
MBA INSTITUTION

In general the demand for MBA Institution is fairly inelastic. Because higher average
prices don’t tend to reduce the number of students going to college. But in theory of
demand it state that when there is an increase in price of a product or service the
less of it will be demanded , inferring a downward sloping demand curve. But
then you are not applying the economic principle of supply & demand correctly. The
supply is the number of student openings & the demand is the number of students.
Currently there's more demand than supply & when the demand is less there will be
more college closures decreasing the supply , not a reduction of tuition & fees.
INCOME ELASTICITY OF DEMAND FOR
MBA INSTITUTION

Income elasticity of demand refers to the sensitivity of the quantity demanded for a
certain good or services to a change in the real income of consumers. With income
elasticity of demand you can tell a particular good or service is necessity or luxury.
People tends to think MBA Institute is a luxury product but that’s not completely
true. Nowadays consumers see a good university degrees as a necessity & not so
much as a luxury. As to why it may be seen as a necessity might be because of the
perceived value most decrees bring in opening up more and better career
opportunities, although not every college guaranties a stable carrier a majority of
consumer see it as being their best shot at managing their usefulness to the society.
That's why many students nowadays chose for education loan for their MBA degree.
So we can conclude that the fluctuation of the income may not affect the demand of
higher education.
CROSS ELASTICITY OF MBA
INSTITUTE
Cross elasticity of demand evaluate the relationship between two product when the
price in one of them changes. It shows the relative change in demand for one product
as the price of the other rises or falls.
Positive cross elasticity of demand – A positive cross elasticity of demand means the
demand for good A will increase as the price of good B goes up. This means the good
A & B are substitute to each other so that If B gets more expensive people are happy to
switch to A.
Negative cross elasticity of demand - A negative cross elasticity of demand indicates
that the demand for good A will decrease as the price of good B goes up. This suggest
that A & B are complementary goods.
With reference to he above conditions MBA Institutions can be consider as a partially
positive cross elasticity as there are no excat substitute goods for MBA institutes but
there are other equivalent or little less equivalent programs which are offered at lower
prices. For example if the price of a full time MBA degree is expensive for some
consumer they can consider going for online MBA programs or certification courses.
CONCLUSION
In the end we can say that MBA education is inelastically demanded for exactly the
same reason any other good or service is inelastically demanded that is the lack of
good substitute. MBA institute will always have a high demand due to the popularity
& eligibility criteria for various MNCs the return on investment is unparrllaed and
an MBA program helps you to be job ready & MBA graduates will defiantly boost
the economy in the future.
 BY –
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