Neoclassical Economics

Neoclassical economics is a school of thought that focuses on how individuals and businesses make decisions based on supply and demand. It assumes that people act rationally to maximize their satisfaction or profit. This theory emphasizes the role of prices in allocating resources efficiently in a free market. Additionally, it incorporates concepts like marginal utility (the added satisfaction from consuming one more unit) and the idea that markets tend to equilibrium, where supply meets demand. Overall, neoclassical economics helps explain how economic agents interact and how markets function.