What´s Microeconomics?

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Microeconimcs is the branch of economics that studies and analyzes the market behavior of both individual firms and consumers to help understand the decision-making process of companies and households. It analyzes the relationships between both buyers and seller and at the same time studies the factors that influence the choices of both those parties. Lots of people get Macroeconimics confused with Microeconomics, and the main difference is that Macroeconomics forcuses on the bigger picture. While Macroeconimcs focuses on the national economy as a whole and the basics of the business world, Microeconomics focusses on just the opposite, this being supply and demand and how small businesses price different merchandise. The main building …show more content…
When the quantity demanded is equal to the quantity supplies it is known as equilibrium price. Investopedia.com defines Equilibrium price is when no suppliers are left with the desire to provide goods at that price and no buyers are left wishing to purchase the goods at that price either. The NY Times had an article about the cheaper prices of turkey during November, which in fact should be the most expensive time to buy it. They compared it to the World Series and how baseball tickets are a lot more expensive during the World Series as should turkey be during November, which is the month of Thanksgiving. One piece of the articles was the most intuitive and popular explanation for a high-demand price dip is that retailers are selling “loss leaders.” Stores advertise very low prices — sometimes even lower than they paid their wholesalers — for big-ticket, attention-grabbing products in order to get people in the door, in the hope that they buy lots of other stuff. You might get your turkey for a song, but then you also buy potatoes, cranberries and pies at the same supermarket — all at regular (or higher) markups. Likewise, Target offers a big discount on select TVs on Friday, which will ideally entice shoppers to come in and buy clothes, gifts and other Christmas knickknacks on that frenzy-fueled trip. Economists describe this tactic as “supply inelastic” and this means that it may be more costly to ramp up turkey production just in time for peak demand during

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