Tendencies of Microeconomics - Essay Example

Microeconomics is the arm of economics that deals with the tendencies of how an individual or a firm arrives at decisions to allot limited resources (Glazer and Hirshleifer, 56). (Glazer and Hirshleifer, 57). In the attached article on the influence of coal on the production of electricity, it is evident that the National thermal power corporation has shown trends of high increase in its Plant Availability Factor (PAF). This has been attributed to an increase in the supply of coal. In the previous periods, the company has been recording low profits due unavailability of coal. In the first two months of the fourth quarter, PAF was 95%. For the second and the third quarter the company recorded 83% and 85% respectively which was a result of an increased supply of coal from India. The steady supply of coal to meet demand will be facilitated by the signed agreement with India, to supply coal which will be fully completed by 2013.

The terms price, demand and supply have their application in the attached article. Supply is the quantity of goods that are available to clients. In the attached article, thermal power corporation effectiveness depends on the amount of coal supplied. Demand is the aspiration to have something for instance, the power produced will be in great demand when the plant availability factor is low, because of scarcity. Price on the other hand is the amount paid back for goods or services provided (Glazer and Hirshleifer, 68). In this case, the price will stabilize if the supply of coal will be guaranteed as a result of the signed pact. Coal, therefore, is an important natural resource for power production in the economy and for the people who consume it.