In microeconomics, decision-makers are individuals or entities that make choices regarding resource allocation, production, consumption, and market interactions. The key decision-makers include:
1. Consumers (Households)
Make choices on what goods and services to buy based on preferences, income, and prices.
Aim to maximize utility (satisfaction) while considering budget constraints.
Face trade-offs and opportunity costs.
2. Firms (Producers)
Decide what, how, and how much to produce based on costs, demand, and competition.
Aim to maximize profits by minimizing costs and optimizing production.
Influence prices and market structures (perfect competition, monopoly, etc.).
3. Government
Regulates markets, sets policies, and intervenes in case of market failures.
Influences economic decisions through taxation, subsidies, and regulations.
Ensures social welfare, public goods provision, and economic stability.
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