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Microeconomics and its applications

While sitting in your office one evening, you begin to think about some of the key microeconomic messages you want to communicate to the Board. (Key concepts include, but are not limited to, supply and demand, pricing, competition, costs & production, and economic value added.) Pick two key concepts and discuss what you will present to the Board and why.

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Microeconomics seeks to analyze the market form or other types of mechanisms that establish relative prices amongst goods and services and/or allocates society's resources amongst their many alternative uses.

Microeconomics is the study of decisions that people and businesses make regarding the allocation of resources and prices of goods and services. This means also taking into account taxes and regulations created by governments. Microeconomics focuses on supply and demand and other forces that determine price levels for specific companies in specific industry sectors. For example, microeconomics would look at how a specific company could maximize it's production and capacity so it could lower prices and better compete in its industry.

Thus it helps the organization to fix the price of the product which the firm is selling. The ...

Solution Summary

This response discusses the microeconomic theories and its applications including breakeven point, fixed costs and variable costs.