Answer to Question #294285 in Microeconomics for Anki

Question

What is microeconomis

Answer 1

Microeconomics is a branch of economics whose main aim is to analyze the impact of individuals and corporate behavior in making choices regarding the allocation and distribution of resources.

Microeconomics tries to answer the question of why and how prices of certain products change over time and what are the key drivers.

When it comes to choices whether individual or corporate the goal is always to weigh the impact of choosing a particular factor over the other and what are some drawbacks of failing to choose another option. All these are related to microeconomics.

Under microeconomics, the key players are grouped into smaller units i.e. sellers, consumers, and suppliers. Out of the grouping, we derive the supply and demand of goods and services and factors influencing change in demand and supply in a given economic setup.

Microeconomics is important in the economy as it helps the firm to achieve a competitive advantage by studying the consumer behavior towards the purchase of its product. If the demand for the product is high the firm can make informed decisions in increasing its supply chain to meet the market demand.