How Do Economic Theories Apply to Business Decisions?
Economic theories such as Microeconomics and Macroeconomics provide frameworks for understanding how markets operate and how economic agents interact. For instance, microeconomic theories help businesses analyze cost structures, determine optimal pricing, and evaluate the elasticity of demand. Macroeconomic theories, on the other hand, assist in understanding broader economic indicators like GDP, inflation, and unemployment, which can affect business cycles and investment decisions.