Microeconomics

What is microeconomics?

Microeconomics is a part of the economy that is in charge of studying the behavior and interaction of economic agents (families and companies) in the markets.

Unlike macroeconomics, does not emphasize great aspects like inflation, interest or economic policies; Rather, it studies goods, prices, markets, and economic agents.

Objectives of microeconomics

The objectives pursued by microeconomics are the following:

• Know the behavior and the relationship between consumers, businesses and organizations.
• Study the effect of price changes in bidders and demanders.
• Understand and identify the processes that take place in a market related to the economy.
• Analyze the markets existing in an economy.

Characteristics of microeconomics

The main characteristics of microeconomics are the following:

• Study the behavior and relationship between different companies and their consumers.
• Along with macroeconomics, makes up the study of economics.
• It is based on the law of supply and demand.
• Its foundations go back to the neoclassical and marginalist school of the 19th century.

Elements of microeconomics

The elements that make up microeconomics are the following:

1. Market goods and services, objects on which the economy is based.
2. Prices established on the products of a market.
3. Markets, those places where two or more people are willing to exchange goods and services.
4. Economic agents, families, companies and their relationship with the State.

Examples of microeconomics

Here are two examples to better understand microeconomics:

1. Faced with a situation in which a store must increase the prices of its products, its microeconomic study determine how this price increase will affect your sales.
2. Some of the studies carried out by microeconomics is that of the marginal utility of the products. This establishes the value that a person gives a good, as he acquires more units of it.

Importance of microeconomics

The importance of microeconomics is that allows to study the way to use resources rationally, including the factors of production, labor, land and capital, to be able to make better decisions and obtain the best possible results.