Microeconomic equilibrium

Microeconomic equilibrium occurs when the marginal revenue is equal to the marginal cost. The microeconomic equilibrium determines a firm's price and volume of a product.

Microeconomic equilibrium is not stable over time, external conditions can affect revenues and costs, which gives a new microeconomic equilibrium. Microeconomic equilibrium is an important concept to be able to explain the prices and volume in businesses in the economy.

The microeconomic equilibrium can help to explain the differences in prices and volumes of various market forms such as monopoly, perfect competition and oligopoly.