The Theory of the Firm studies the profit-maximizing behavior of a firm, and that behavior depends in part on the demand curve the firm faces. There are two interesting cases. Under Perfect Competition, the firm faces a horizontal demand curve. It can sell any quantity desired at the market price, but cannot sell anything above the market price. Under Monopoly / Monopolistic Competition, the firm faces a downward sloping demand curve. Its price does affect the quantity sold either because it is the only firm in the market (a monopoly) or because the products in its market are not perfect substitutes (monopolistic competition).
Classic Economic Models
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Balance of Payments
Endogenous Technical Change
Federal Funds (Fed Funds) Rate
Fixed Exchange Rate
Floating Exchange Rate
Gross Domestic Product (GDP)
Production Possibility Frontier
Reservation Wage Rate
Theory of the Consumer
Theory of the Firm
Velocity of Money