Overview
Microeconomic theory provides a framework for understanding how individuals and firms make decisions regarding resource allocation and pricing. It emphasizes the interactions between supply and demand, consumer behavior, and market structures. By analyzing these elements, students can gain insights ...
Key Terms
Example: The supply of apples increases during harvest season.
Example: The demand for electric cars is rising as consumers seek eco-friendly options.
Example: The market reaches equilibrium when the price of a product stabilizes.
Example: If the price of coffee rises, the demand may decrease, showing elasticity.
Example: Consumers aim to maximize their utility when choosing products.
Example: An indifference curve might show combinations of apples and oranges that yield equal satisfaction.