Fill in the blank with appropriate alternative given below.
Micro Economics is a __________________________ equilibrium approach.
Micro Economics is a Partial equilibrium approach.
In microeconomics each of the individual units is studied in isolation. That is, while studying one unit/variable the effect of other units or variables is taken to be constant. It ignores the interdependence of economic variables. In other words, it is based on the assumption of “other things remain constant” (ceteris paribus). Thus, because of this assumption, it is said that microeconomics has a partial equilibrium approach.
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- Introduction and Features of Micro Economics