Introduction to microeconomics

What is microeconomics?

Microeconomics is the branch of economics that studies individual units, like households and firms, and their interactions in markets.

What is demand?

Demand is the quantity of a good or service that consumers are willing and able to purchase at various prices.

What is supply?

Supply is the quantity of a good or service that producers are willing and able to sell at various prices.

What is the law of demand?

The law of demand states that, all else being equal, as the price of a good decreases, the quantity demanded increases.

What is the law of supply?

The law of supply states that, all else being equal, as the price of a good increases, the quantity supplied increases.

What is equilibrium?

Equilibrium is the point where the quantity demanded equals the quantity supplied for a particular good or service.

What is a market?

A market is a place or system where buyers and sellers interact to exchange goods and services.

What is elasticity?

Elasticity measures how much the quantity demanded or supplied of a good responds to changes in price.

What is consumer surplus?

Consumer surplus is the difference between what consumers are willing to pay for a good and what they actually pay.

What is producer surplus?

Producer surplus is the difference between what producers are willing to accept for a good and what they actually receive.