40)Micro economics helps determine the following:
Select one:
a. Equilibrium of the Economy
b. Equilibrium of a Firm
c. Equilibrium of an Individual
d. Equilibrium of the Industry
Answers
Answer:
The right answer is c. Individual
Answer : b. Equilibrium of a Firm
Explanation :
Equilibrium of a Firm is the correct answer.
Microeconomics is the branch of economics that studies the behavior of individual economic units such as households, firms, and industries and how they interact in markets to allocate resources. It is primarily concerned with the decision-making process of firms and how they interact with other firms in the market.
In microeconomics, a firm is said to be in equilibrium when it is maximizing its profits, that is, when it cannot increase its profits by changing the quantity it produces. This is also known as the profit maximization point. At this point, the firm is producing the quantity of goods that maximizes its profits and is charging the price that maximizes its revenue. Microeconomics helps firms to understand the market conditions and make decisions that will lead to the most profitable outcome.
- a. Equilibrium of the Economy: This is not typically studied within the scope of microeconomics as it is more concerned with the behavior of individual economic units such as households, firms, and industries. Macroeconomics is the branch of economics that deals with the performance, structure, and behavior of the economy as a whole, including issues such as inflation, unemployment, and economic growth.
- c. Equilibrium of an Individual: Microeconomics is mainly focused on the behavior of firms and how they interact in markets, rather than the behavior of individuals. However, it helps individuals to understand how the market works and how their decisions affect the market.
- d. Equilibrium of the Industry: Microeconomics helps to understand the market conditions of an industry and how firms in that industry interact with each other. It also helps to understand the market forces that determine the price and quantity of goods and services produced by an industry. Industry equilibrium is the point where the total quantity of goods supplied by all firms in an industry equals the total quantity of goods demanded by all buyers in the same industry.
It's worth noting that microeconomics, macroeconomics and other branches of economics are interrelated, and understanding the behavior of firms, individuals, and industries is important for understanding the overall performance of an economy.
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