What is a neoclassical economy?

At the end of the 19th century, the neoclassical economy developed an approach to an economy that focuses on supply and demand. Unlike previous theories, the neoclassical economics of the economy consider the study of resources between competitive use or goals. It is distinguished from other economic philosophies according to the basic prerequisites that make the economy and economic behavior. The School of Neoclassical Economics assumes that individuals take rational decisions between competitive results, that companies are trying to maximize profits, while individuals maximize satisfaction or happiness and that individuals act separately and have complete, relevant information. In summary, theories that are based on these assumptions explain the allocation of rare sources between competitive goals and include the neoclassical economy. Value and price

The value and price use neoclassical economists to explain the functioning of supply and demand. In a neoclassical point of view, individuals unlimited have to want tocollided with a shortage. The decisions that individuals and companies must make when they seek to maximize satisfaction or profits are developed on the market by conducting supply and demand for value assignment. In the neoclassical economy, the value of good satisfaction brings individuals. The price is a mechanism that determines how and whether it is possible to align the conflict wishes of companies and individuals.

For example, an individual might want to buy a car at a certain price. Others could also want to buy the same car for the same price. Regardless, manufacturers may be unwilling or incapable of producing as many cars as consumers want at this price. Consumer frustration begins to raise the price of cars until some potential buyers are excluded from the market by deciding to be satisfied from the ownership of the car for a higher price. The value of the car on the buyer decreases,How the price changes. By removing buyers by changes in price and value, demand and supply, agreements are concluded.

Since its foundation as a successor to the theory of the classical economy from the 18th century, the neoclassical economy had a deep impact on economic thinking. His emphasis on mathematics and models as economic theory was essential for the creation of modern economies. Today, most of what is taught at university courses on microeconomics and macroeconomics are derived from neoclassical economic analysis. The neoclassical economy has become the most widespread theory of economics.