Define and Explain Microeconomy in Detail

The microeconomics is a part of the economy that studies the economic behavior of agent’s individual economic, as consumers, businesses, workers and investors are; as well as the markets. Consider the decisions each one makes to meet certain objectives of their own.

The basic elements on which the microeconomic analysis focuses are goods, prices, markets and economic agents. The great majority of the models that are exposed in this article are based on the existence of an economic and social framework of decentralized economy, in which there is private property.

The microeconomics has several development branches of which the most important are: consumer theory, the demand, the producer, the general equilibrium and markets active financial. They cannot be considered entirely separate because the results of some aspects influence the others.

For example, companies not only offer goods and services, but also demand goods and services to produce their own. Microeconomics proposes mathematical models that develop assumptions about the behavior of agents economic, the conclusions reached using these models will only be valid, insofar as the assumptions are met, which is not always the case, especially if the cases are very strong or restrictive.

One of the most important additions to the study of microeconomics is the so-called game theory. Game theory is a mathematical theory that studies the behavior of various agents when the decisions made by each influence how much each one achieves the objectives they want. It is used, for example, in the theory of industrial production, to study the cases of oligopoly and imperfect competition.

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