The Concept of Microeconomics

The paper attempts to present the concept first followed by its practical utility. The concepts presented are perfect competition, monopoly, imperfect competition, and oligopoly. These concepts are of high practical importance and everyone can be felt if she/he observes the market. The concepts are described simply and lucidly, which can be understood even by a layman. No chart and graphs have been used to support the description.The paper is prepared in such a manner that each question is followed by its answer so that it will be of immense help to the reader to easily understand the situation. A brief structure of the answer is given below:This paper is meant to attain the academic objective of a thorough understanding of the concepts in microeconomics and its usefulness in the actual market. The paper attempts to present the concepts in a simple and comprehensible manner so that the reader can get a clear picture of what is described. A perfect market is a market condition where there are a large number of buyers and sellers. The sellers are allowed to enter and exit the market at any time. A perfect market encourages competition and price stability. At the same time, better quality product/service can be expected as buyers have many choices to select their seller. A monopoly is a situation wherein single seller exercise control over all the operations in his/her product market and makes use of every up and down in the market for economic gain. A monopolistic market is featured by many small sellers in the market. Each seller is small relative to the total market and naturally, the pricing decision of the firm has only a negligible effect on the total market. Firms in the industry make a differentiated product.From an economist’s point of view, a market is a distinctive mix of various market forces like the number of buyers and sellers, free/ barriers to entry or exit of firms, homogeneous/heterogeneous product.