Microeconomic Definition of Terms

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Definition of Terms
Everyone needs to eat and many people will use a grill to cook their food. In looking at the supply and demand of barbecue grills, several terms will be defined, including economics, microeconomics, the law of supply, and the law of demand. Many factors can lead to a change in supply and demand, which will be reviewed prior to looking at an analysis of trends in barbecue grill consumption patterns. This detailed and difficult analysis is critical to businesses.

Definition of Economics
According to Colander (2008), “Economics is the study of how human beings coordinate their wants and desires, given the decision-making mechanisms, social customs, and political realities of the society.” (p. 4) Will anyone in the United States want a grill, if so when, what kind and in what price range? What will the grills be made of and what features will they have? Will the necessary raw materials be available? Will the products be made here or over seas? Will they use charcoal, gas, or electricity? Will laws allow consumers to use the grills? Economics is looking at barbecue grills as a whole industry.

Definition of Microeconomics
Colander defines microeconomics as, “the study of individual choice, and how that choice is influenced by economic forces.” (p. 14) Microeconomics looks at how an individual decides what to buy and where or what to sell and for how much. What kind of grill will suit his or her needs while staying within his or her budget and where is the best place to purchase the grill? What specific features does he or she need or want? If a retailer is unable to answer effectively these questions, they could go down the wrong path and wind up not realizing full potential profits or worse yet have losses and an overabundance of unwanted product. Microeconomics is looking at barbecue grills from the viewpoint of an individual consumer or supplier or retailer.

Definition of the Laws of Supply and Demand
Relationships exist between...
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