Why does the price of coffee rise when a frost hits Brazil? Why do airlines charge different fares for the same seat? Why do some firms grow enormous while others stay small? Microeconomics tackles these questions. It studies individual agents, households, firms, and the markets they inhabit. It is the economics of the particular rather than the aggregate.

The field rests on a few powerful ideas. People face trade-offs. The cost of something is what you give up to get it. Rational buyers and sellers respond to incentives. Markets often allocate resources efficiently, but not always. These principles explain a surprising range of behavior, from why concert tickets sell out to why insurance markets can collapse.

Microeconomics is not just theory. Businesses use it to set prices and decide how much to produce. Governments use it to design taxes and regulations. Antitrust lawyers use it to argue whether a merger will hurt consumers. The tools are mathematical, but the questions are practical. Anyone who has ever haggled over a price or compared two job offers has done microeconomics without knowing it.

Core topics

• Supply and demand
• Consumer choice
• Firm behavior and market structure
• Labor markets
• Market failure and regulation