Microeconomics concepts and Principles

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Microeconomics Concepts and Principles
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Contents
Introduction Components of microeconomics Principl
es of microeconomics Microeconomics v/s
Macroeconomics Conclusion
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Introduction
Microeconomics is the field of economics that
studies the decision of consumer behavior within
the economy, such as individuals, households, and
firms.
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Components of Microeconomics
Elasticity of demand Marginal Utility
Elasticity of Supply Market Structures
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Elasticity of Demand
Elastic demand happens when the quantity of goods
or services desired fluctuates in proportion to
price variations. Marginal Utility Marginal
utility means the additional level of
satisfaction or benefits that an individual get
by consuming the goods or services. It's a
concept used by economists to know how many
people are willing or desired to take the product.
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Elasticity of Supply
The price elasticity of supply is a term used in
economics to show how responsive or elastic the
amount of an item or service that is supplied is
to a change in its price. Market Structure Market
structure describes the way various industries
are classified and achieve the particular on how
fiercely and in what ways they compete with one
another for customers' goods and services.
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Principles of Microeconomics

1. Demand and Supply
2. Opportunity Cost
3. Law of diminishing Marginal Utility
4. Giffen goods

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Demand and Supply
When demand exceeds supply over a period,
suppliers either increase the supply or increase
the prices. As prices go up, demand would ideally
reduce since the number of people who can afford
goes down. Opportunity Cost A consumer who also
makes decisions has a limited budget and an
unlimited number of ways to spend that money. The
opportunity cost is the price a consumer pay for
not choosing the best alternative option.
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Law of Diminishing Marginal Utility
When demand exceeds supply over a period,
suppliers either increase the supply or increase
the prices. As prices go up, demand would ideally
reduce since the number of people who can afford
goes down.
Giffen Goods
Giffen goods are essentials whose increased
prices have no impact on sales. Giffen goods is
unique due to the price and demand relation.
These are rational choices when buyers are
willing to spend higher even in the face of price
hype. These extraordinary items are referred to
as "Giffen goods," with a positively sloping
demand curve.
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Microeconomics v/s Macroeconomics
Microeconomics is the field of economics that
studies the decision of consumer behavior.
The connection among various countries and how
the policies of one have an impact on the other
is examined in macroeconomics.
Demand and supply
National Income
Production theory
Revenue and Inflation
Labour economics
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