Overview
Microeconomics is essential for understanding how individual choices affect the economy. It focuses on the behavior of consumers and firms, analyzing how they interact in markets to determine prices and allocate resources. By studying concepts like supply and demand, elasticity, and market structure...
Key Terms
Example: The supply of oranges increases during the harvest season.
Example: The demand for ice cream rises in summer.
Example: The equilibrium price of a product is where the quantity supplied equals the quantity demanded.
Example: If the price of a product increases and demand decreases significantly, it is considered elastic.
Example: Consumers seek to maximize their utility when making purchasing decisions.
Example: A local utility company may have a monopoly on electricity supply.