In microeconomics, the decisions and functioning of individual consumers and households (what to do, what to buy, etc.), and firms or other organisations (what goods to produce, how to produce them, what prices to charge, etc.) are considered. It includes the study of the demand, supply and prices of individual goods and services such as petrol, maize, haircuts and medical services.

Understanding microeconomics is a comprehensive introduction to microeconomics in general, set against a contemporary South African background. The easy style and many practical examples make the content extremely accessible. The book covers all the material usually prescribed for introductory courses, and it lays a solid foundation for intermediate and advanced studies in economics. This third edition is a revised and slightly expanded version of the second edition. Examples have been adjusted (where necessary), real-life case studies are provided at the end of some chapters, and the structured test bank has been drastically expanded to facilitate the lecturers’ teaching and assessment needs to promote student academic success.

A companion to this book, Understanding macroeconomics, is also available.

Philip Mohr is a retired professor of economics.
Derek Yu is a professor of economics at the University of the Western Cape.