Question 34 of 41
Q.State with reasons whether you agree or disagree with the following statement:
Scope of micro economics includes only the theory of product pricing.
Maharashtra MsbshseMaharashtra HSC (MSBSHSE) Board 2026Subjective· 4mImportance★★★★★
83% · 34/41 Questions
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Start your 14-day free trial to unlock the full solution →The statement is wrong. Microeconomics covers three broad areas — the theory of product pricing, the theory of factor pricing, and the theory of economic welfare — not just product pricing.
I disagree with the statement. The scope of microeconomics is generally divided into three main parts:
- Theory of product pricing. This explains how the price of an individual commodity is determined by the forces of demand (based on utility and consumer behaviour) and supply (based on cost and producer behaviour). This is only the first part.
- Theory of factor pricing (theory of distribution). This explains how the prices of the factors of production are determined — that is, how rent (for land), wages (for labour), interest (for capital) and profit (for the entrepreneur) are fixed. …
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