Microeconomic Equilibrium

Microeconomic equilibrium refers to an economic balance that relates to the consumption and/or production decisions of an individual economic agent. In microeconomics, this concept is used to explain a consumer's purchasing decisions and a firm's production choices.

• Consumer Equilibrium. Consumer equilibrium is a partial microeconomic equilibrium. Based on their personal preferences, the consumer chooses a combination of goods that maximizes their individual utility.
  
• Competitive Firm Equilibrium. The equilibrium of a competitive firm is a partial economic equilibrium that results from the firm’s decision on the optimal quantity of goods to produce in a perfectly competitive market.