Microeconomics

Microeconomics is defined as a problem of allocating scarce resources in relation to a number of possible purposes. The logical consequences of this problem lead to the study of economic behavior of individual consumers and firms as well as the distribution of production and income among them. Microeconomics is the basis of modern economic theory, studying their fundamental relationships.

Families are considered suppliers of labor and capital, and that demand for consumer goods. Firms are considered applicants for employment and production factors and product suppliers.

Consumers maximize utility from a given budget. Firms maximize profit from cost and revenue potential.

Microeconomics seeks to analyze the market and other mechanisms that establish relative prices between goods and services, allocating resources to alternative modes of which certain individuals have organized a society.

Microeconomics is concerned to explain how it raised the price of final products and factors of production in equilibrium, usually quite competitive. It is divided into:

Consumer Theory: Study of consumer preferences by analyzing their behavior, their choices, values and restrictions on market demand. From this theory determines the demand curve.
Theory of the Firm: Study the economic structure of organizations whose goal is to maximize profits. Organizations that buy it for factors of production and sell the product of these factors of production to consumers. It studies market structures, both competitive and monopolistic. From this theory determines the supply curve.
Production Theory: Study the process of transforming the company acquired factors in end products to the market. Studies the relationships between the variations of factors of production and its consequence in the final product. Determines the cost curves, which are used by firms to determine the optimum amount of the bid.
Microeconomics explains the market practices, which are divided into: Monopoly, Monopsony, Oligopoly, oligopsony, Perfect Competition and Monopolistic Competition.