◆ THE ECONOMY
How economies actually work
Markets, firms, prices, and policy, the forces shaping every dollar in your world.
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The Economics Foundation
How economists actually think: scarcity, prices, firms, and markets, built up from the ground. Jump in anywhere.
Start withShort Run, Long Run: Why the Same Firm Acts Completely Differently Over Time
One question unlocks how any firm responds to a demand shock: which inputs can it actually change right now? The answer is never the same twice.
Read more →- Government vs. Market: When Public Provision Makes Sense and When It Doesn't
- Subsidies Work — Just Not Always the Way Intended
- The Free-Rider Problem: Why Public Goods Don't Fund Themselves
- Comparative Advantage: The Principle Behind Every Trade Relationship on Earth
- What Is Perfect Competition? The Market Structure That Sets the Benchmark
- Thinking at the Margin: The One-More-Unit Rule That Optimizes Every Decision
- The Price on the Tag Is Not the Same for Everyone
Browse by category
- Tax Incidence: Who Actually Pays the Tax?
- What Is Scarcity? The Economic Problem That Never Goes Away
- Minimum Wage: The Wage Floor and Its Effects
- Fixed vs. Variable Costs: How Cost Structure Shapes Business Decisions
The Firm & Production 21Competition & Monopoly 22Imperfect Competition 14Labor Economics 12Factor Markets 8
All of Firms & Markets · 77 →Common questions
Protectionism: Shielding Domestic Industries from Foreign Competition
Protectionism is the use of trade barriers — tariffs, quotas, subsidies, and regulations — to shield domestic industries from foreign competition.
Read more →The Profit-Maximization Rule: Why Every Firm Targets MR = MC
The profit-maximization rule states that firms maximize profit by producing where marginal revenue equals marginal cost.
Read more →Positive Externality: When Transactions Benefit People Who Didn't Pay
A positive externality is an uncompensated benefit conferred on third parties by a market transaction.
Read more →Economies of Scale: Why Getting Bigger Sometimes Means Getting Cheaper
Economies of scale occur when long-run average cost falls as output increases. They are the economic engine of industrial concentration — and when they're…
Read more →What Is Business Cycle?
The recurring pattern of expansion and contraction in economic activity. Understanding cycles helps predict downturns and prepare.
Read more →What Utility Means in Economics — and Why It's Not About Happiness
Utility is economics' name for how much a choice satisfies you — a ranking, not a feeling. Here is what it actually measures, and what it deliberately ignores.
Read more →Long-Run Equilibrium: Where Competition Eventually Takes Every Market
Long-run equilibrium is the state a competitive market reaches after all entry and exit adjustments are complete.
Read more →What Is Monetary Policy?
Government actions to control the money supply and interest rates to achieve economic goals like price stability and employment. Learn the difference between…
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