Unit Overview
This unit explains how individual markets operate and how prices coordinate economic activity. We examine how buyers and sellers interact, how firms make production decisions, and how different competitive structures shape outcomes.
By the end of this unit, you will be able to analyze market behavior using economic models and evaluate how competition and market power affect efficiency.
Learning Objectives
- Explain how supply and demand determine equilibrium prices.
- Measure and interpret price elasticity of demand and supply.
- Understand consumer decision-making using utility theory.
- Analyze firm production and cost structures.
- Differentiate between competitive and non-competitive market structures.
Lessons in This Unit
Lesson 2.1: Demand
Law of demand, determinants, and shifts.
Lesson 2.2: Supply
Law of supply and production decisions.
Lesson 2.3: Market Equilibrium
Price formation and adjustment mechanisms.
Lesson 2.4: Elasticity
Responsiveness of buyers and sellers to price changes.
Lesson 2.5: Consumer Behavior
Utility maximization and rational choice.
Lesson 2.6: Costs & Production
Short-run and long-run cost structures.
Lesson 2.7: Perfect Competition
Competitive equilibrium and efficiency.
Lesson 2.8: Monopoly & Oligopoly
Market power and strategic firm behavior.
Unit Assessment
- Complete the Unit 2 Quiz
- Analyze a real-world industry and classify its market structure
- Graph supply and demand shifts using spreadsheet software
Self-Paced Learning Guidance
This unit is structured for independent mastery. Progress sequentially through each lesson, complete applied exercises, and test your understanding before moving forward. Microeconomics builds analytical skills essential for advanced economic study.