Editing Microeconomics (section)

=== Price theory ===
Microeconomics is also known as price theory to highlight the significance of prices in relation to buyer and sellers as these agents determine prices due to their individual actions.<ref name=":1" /> Price theory is a field of [[economics]] that uses the [[supply and demand]] framework to explain and predict human behavior. It is associated with the [[Chicago school of economics|Chicago School of Economics]]. Price theory studies [[competitive equilibrium]] in [[Market (economics)|markets]] to yield testable hypotheses that can be rejected.

Price theory is not the same as microeconomics. Strategic behavior, such as the interactions among sellers in a market where they are few, is a significant part of microeconomics but is not emphasized in price theory. Price theorists focus on competition believing it to be a reasonable description of most markets that leaves room to study additional aspects of tastes and technology. As a result, price theory tends to use less [[game theory]] than microeconomics does.

Price theory focuses on how agents respond to prices, but its framework can be applied to a wide variety of socioeconomic issues that might not seem to involve prices at first glance. Price theorists have influenced several other fields including developing [[Public choice|public choice theory]] and [[law and economics]]. Price theory has been applied to issues previously thought of as outside the purview of economics such as criminal justice, marriage, and addiction.