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Study Session 4
Economics
Microeconomic Analysis
Copyright 2015 CFA Institute

This study session focuses on the microeconomic principles used to describe the marketplace behavior of consumers and firms. The first reading explains
the concepts and tools of demand and supply analysisthe study of how buyers and sellers interact to determine transaction prices and quantities. The
second reading covers the theory of the consumer, which addresses the demand for goods and services by individuals who make decisions to maximize the
satisfaction they receive from present and future consumption. The third reading deals with the theory of the firm, focusing on the supply of goods and
services by profit-maximizing firms. That reading provides the basis for understanding the cost side of firms profit equation. The final reading completes
the picture by addressing revenue and explains the types of markets in which firms sell output. Overall, the study session provides the economic tools for
understanding how product and resource markets function and the competitive characteristics of different industries.

READING ASSIGNMENTS
Reading 13 Demand and Supply Analysis: Introduction
by Richard V. Eastin, PhD, and Gary L. Arbogast, CFA
Reading 14 Demand and Supply Analysis: Consumer Demand
by Richard V. Eastin, PhD, and Gary L. Arbogast, CFA
Reading 15 Demand and Supply Analysis: The Firm
by Gary L. Arbogast, CFA, and Richard V. Eastin, PhD
Reading 16 The Firm and Market Structures
by Richard G. Fritz, PhD, and Michele Gambera, PhD, CFA

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