Microeconomics is the study of the economic behaviour of individual consumers, firms, and industries and the distribution of total production and income among them. It considers individuals both as suppliers of labour and capital and as the ultimate consumers of the final product. On the other hand, it analyzes firms both as suppliers of products and as consumers of labour and capital.
Microeconomics seeks to analyze the market form or other type of mechanism that establishes relative prices among goods and services and allocates society's resources among their many alternative uses.
Concepts in microeconomics
- Scarcity - Opportunity cost - Free goods
- Consumer Theory - Preference - Indifference curve - Utility - Marginal utility - Income
- Aggregation of individual demand to total, or market, demand
- Supply and demand - Elasticity - Consumer and producer surplus
- Market form - Perfect competition - Monopoly - Monopolistic competition - Oligopoly
- Production, costs, and pricing - Economies of scale - Economies of scope - Profit maximization - Factors of production - Price discrimination - Transfer pricing - joint product pricing - price points
- Pareto efficiency - Kaldor-Hicks efficiency - X-efficiency
- Concentration ratio - Herfindahl index
- Market failure - Externality
- General equilibrium
- Game theory