Topic summary
Price theory
Extracted from the Wikipedia article Microeconomics.
Price theory
Microeconomics is also known as price theory to highlight the significance of prices for buyers and sellers, who determine them through their individual actions. Price theory is a field of economics that uses the supply and demand framework to explain and predict human behavior. It is associated with the Chicago School of Economics. Price theory studies competitive equilibrium in markets to yield testable hypotheses that can be rejected.