What is microeconomics?

Front of Macroeconomía, which is that part of the Economy that studies the collective magnitudes of a specific country or territory, Microeconomics, constitutes the part of the Economy that is oriented to economic analysis from the point of view of the behavior of private entities. Whether it is people or companies. That is, they are interested in consumers, workers, companies.

It is, therefore, a branch of the economy that analyzes how companies and households make their decisions to allocate their limited resources according to the market. At the same time, it examines the way in which the behaviors of the different units in the market influence the supply and demand of goods and services, as well as their prices. Microeconomics analyzes both the different types of market and the market mechanisms that lead to establish the relative prices of the different goods and services and the different allocations of resources.

In the first case, you will distinguish between in the perfect competition, monopoly, oligopoly, monopolistic competition, duopoly. The distinction between these types of market is based on the number of suppliers and demanders that exist in each of them. Possible market failures and the conditions necessary for perfect competition to exist are also analyzed. Other considerations include the elasticity of goods and services, the law of supply and demand, equilibrium theory, opportunity cost…

The relationship between supply and demand constitutes the model by which prices are established in the market. There is a direct relationship between the price of goods and services and the number of units that bidders are willing to offer. That is, at a higher price, more units, and vice versa. The opposite occurs in the case of the lawsuit. Buyers are willing to buy more quantity when the price is lower. From the interconnection of both curves, arises in the breakeven in the market, for a certain type of goods or services.

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