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What are the components of microeconomics?

Economics

What are the components of microeconomics?

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The main components of microeconomics include:

  • Market structures. The market structure is the general organization and the characteristics of different markets. Market structures are differentiated by the levels of competition and pricing. A perfect example of a market structure is perfect competition.
  • Demand, supply, an equilibrium. These components help to determine the relationship between price, supply, and demand. Besides, the interaction of demand and supply aid in determining market equilibrium. Elasticity is also used in measuring the effects of changes in price on aggregate demand and supply.
  • Theory of price. Price helps to determine how the prices of goods and services are determined in different markets. The theory is mostly concerned with how forces of demand and supply interact.