The interaction of supply and demand between individual producers and consumers is studied within microeconomics
In microeconomics, the point at which supply and demand meet is called the equilibrium price
In macroeconomics, to study the aggregate means to study total supply and demand
Explanation:
- A basic definition of microeconomics is the study of how an individual, whether it is a single person or business, decides how to allocate resources, and the interaction that occurs between those individuals or businesses.
- Most people are introduced to microeconomics through the study of scarce resources, money prices, and the supply and demand of goods and services.
- The equilibrium price is the price at which the quantity demanded equals the quantity supplied.
- Graphically, it is the point at which the two curves intersect. Mathematically, it can be found by setting the demand and supply curves equal to one another and solving for price.
- Aggregate supply is the total amount of goods and services that firms are willing to sell at a given price in an economy. The aggregate demand is the total amounts of goods and services that will be purchased at all possible price levels.
