[Verse 1] When price goes up and quantity falls down That's the demand curve, wearing economics crown But how much change depends on elasticity Elastic means responsive, inelastic means rigidity Consumer surplus is the value that you gain When you pay less than what you'd pay through all the pain Producer surplus is the profit sellers make Above the minimum price they're willing to take [Chorus] Supply and demand, they dance hand in hand Elastic or inelastic, understand the plan Consumer surplus, producer surplus too Microeconomics working just for you Perfect competition, monopoly's grip Oligopoly games, don't let your profits slip Market structures guide us, pricing sets the way Learn these economic laws and you'll win the day [Verse 2] Production functions show how inputs turn to output Labor, capital, land - that's what it's about Total cost rises as you produce much more Average cost per unit, marginal's at the door Marginal cost is extra cost for one more thing Economies of scale make big production sing When average costs fall as your output expands That's the power of size in economic hands [Chorus] Supply and demand, they dance hand in hand Elastic or inelastic, understand the plan Consumer surplus, producer surplus too Microeconomics working just for you Perfect competition, monopoly's grip Oligopoly games, don't let your profits slip Market structures guide us, pricing sets the way Learn these economic laws and you'll win the day [Bridge] Perfect competition, many firms compete Price takers all, no power to cheat Monopolistic competition, products differ slightly Oligopoly's few firms, Nash equilibrium nightly Prisoner's dilemma shows cooperation's test When working together gives the very best But self-interest leads to suboptimal play Game theory explains it in a strategic way [Verse 3] Monopoly power lets you set the price Price discrimination can be rather nice First degree takes all consumer surplus away Second degree uses quantity to make you pay Third degree separates markets by demand Natural monopolies need regulation's hand Average cost pricing keeps the public served While covering costs that monopolists have earned [Chorus] Supply and demand, they dance hand in hand Elastic or inelastic, understand the plan Consumer surplus, producer surplus too Microeconomics working just for you Perfect competition, monopoly's grip Oligopoly games, don't let your profits slip Market structures guide us, pricing sets the way Learn these economic laws and you'll win the day [Outro] From elasticity to market power's reign Microeconomics flows through every chain CFA knowledge building brick by brick These economic principles will do the trick
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