CBSE Class 11 Microeconomics Notes

Microeconomics is the study of households’, individuals’, and firms’ behaviour towards the allocation of resources and the decision-making process. In short, it deals with the choices made by people and the factors affecting their choices. GeeksforGeeks Class 11 Microeconomics Notes have been designed according to the CBSE Syllabus for Class 11. These revision notes consist of detailed Chapter-wise important topics and concepts. Here, the learners can get easy access to the Chapter-wise notes from the below-mentioned quick links. The notes contain 10 chapters covering every important topic, like Production Function, Demand, Supply, Cost Function, Forms of Market, Consumer Equilibrium, etc. 

Chapter 1: Introduction

The first chapter of Class 11th Microeconomics covers the introductory section of the subject. It talks about microeconomics and macroeconomics, along with the differences between them. Other important topics of this chapter that covers the basics of the subject are Economic Problem, Central Problems of an Economy, and the Production Possibility Curve. 

• Introduction to Microeconomics
• Microeconomics and Macroeconomics: Meaning, Scope, Difference and Interdependence
• Difference between Microeconomics and Macroeconomics
• Interdependence between Microeconomics and Macroeconomics
• Economic Problem & Its Causes
• Central Problems of an Economy
• Opportunity Cost : Definition, Types, Formula & Examples
• What is the Production Possibility Curve?
• Difference between Centrally Planned Economy and Market Economy

Chapter 2: Consumer’s Equilibrium

The second chapter of Class 11th Microeconomics is Consumer’s Equilibrium. A consumer is a person who buys goods and services for the satisfaction of their needs and wants. The consumer is the main part of a market and an economy. Therefore, this chapter entails important information regarding the consumer, their behaviour, equilibrium, and utility. The notes of this chapter cover other important topics like Diminishing Marginal Utility, Indifference Curve, and Budget Line. 

• Theory of Consumer Behaviour
• Difference between Needs and Wants
• Utility Analysis : Total Utility and Marginal Utility
• Law of Diminishing Marginal Utility (DMU) : Meaning, Assumptions & Example
• Consumer’s Equilibrium in case of Single and Two Commodity
• Indifference Curve : Meaning, Assumptions & Properties
• Budget Line: Meaning, Properties, and Example
• Difference between Budget Line and Budget Set
• Shift in Budget Line
• Consumer’s Equilibrium by Indifference Curve Analysis
• Difference between Cardinal Utility and Ordinal Utility

Chapter 3: Demand

Demand for a commodity or service helps an organization in deciding its production, marketing, and other essential things. It is important for the learners to understand the Individual and Market Demand for a product or service. The third chapter of Class 11th Microeconomics notes covers everything required to know about demand. The notes also cover the change in demand and quantity demanded. 

• Theory and Determinants of Demand
• Individual and Market Demand
• Difference between Individual Demand and Market Demand
• What is Demand Function and Demand Schedule?
• Demand Curve
• Law of Demand
• Movement along Demand Curve and Shift in Demand Curve
• Difference between Expansion in Demand and Increase in Demand
• Difference between Contraction in Demand and Decrease in Demand
• Substitute Goods and Complementary Goods
• Difference between Substitute Goods and Complementary Goods
• Normal Goods and Inferior Goods
• Difference between Normal Goods and Inferior Goods
• Types of Demand
• Substitution and Income Effect
• Difference between Substitution Effect and Income Effect
• Difference between Normal Goods, Inferior Goods, and Giffen Goods

Chapter 4: Elasticity of Demand

The fourth chapter of Class 11th Microeconomics Elasticity of Demand explains in detail how a change in the price or other factors affecting the demand of a commodity changes its demand. There are three types of elasticity of demand, but the notes cover Price Elasticity of Demand in detail as per the CBSE Curriculum 2022-2023. 

• Price Elasticity of Demand: Meaning, Types, Calculation and Factors Affecting Price Elasticity
• Methods of Measuring Price Elasticity of Demand: Percentage and Geometric Method
• Relationship between Price Elasticity of Demand and Total Expenditure

Chapter 5: Production Function: Returns to a Factor

The next chapter of Class 11th Microeconomics, Production Function: Returns to a Factor explains in detail how an organization can produce the maximum number of outputs with the given set of inputs or resources. It also consists of important topics like Product: Total Product, Marginal Product, and Average Product, Law of Variable Proportion, Relationship between TP, MP, and AP, and Law of Diminishing Returns. 

• Production Function: Meaning, Features, and Types
• What is TP, AP and MP? Explain with examples.
• Law of Variable Proportion: Meaning, Assumptions, Phases and Reasons for Variable Proportions
• Relationship between TP, MP, and AP
• Law of Returns to Scale: Meaning and Stages
• Difference between Returns to Factor and Returns to Scale

Chapter 6: Concepts of Cost and Revenue 

The sixth chapter of Class 11th Microeconomics is Concepts of Cost and Revenue. The notes of this chapter cover in detail the Cost Function, fixed and variable cost, Interrelation between Costs, Revenue, and the Relationship between Revenues. 

• What is Cost Function?
• Difference between Explicit Cost and Implicit Cost
• What is Cost ? | Types of Cost
• What is Total Cost ? | Formula, Example and Graph
• What is Average Cost ? | Formula, Example and Graph
• What is Marginal Cost ? | Formula, Example and Graph
• Difference between Total Variable Costs and Total Fixed Costs
• Interrelation between Costs
• Types of Cost
• Concepts of Revenue| Total Revenue, Average Revenue and Marginal Revenue
• Relationship between Revenues (AR, MR and TR)
• Break-even Analysis: Importance, Uses, Components and Calculation
• What is Break-even Point and Shut-down Point?

Chapter 7: Producer’s Equilibrium

Producer’s Equilibrium is a situation in Microeconomics in which an organization maximizes its profits. The seventh chapter Producer’s Equilibrium of Class 11th Microeconomics covers everything required to know about producer’s equilibrium, including assumptions and determination. 

• Producer’s Equilibrium: Meaning, Assumptions, and Determination

Chapter 8: Theory of Supply

The eighth chapter of Class 11th Microeconomics Theory of Supply explains how a change in the price of a commodity changes its supply in the market. The notes also cover everything required to know about the Law of Supply, Changes in Quantity Supplied, Change in Supply, and Price Elasticity of Supply. 

• Theory of Supply: Characteristics and Determinants of Individual and Market Supply
• Difference between Stock and Supply
• Supply Function and Supply Schedule
• Supply Curve
• Law of Supply: Meaning, Assumptions, Reason and Exceptions
• Changes in Quantity Supplied and Change in Supply
• Difference between Movement along Supply Curve and Shift in Supply Curve
• Difference between Change in Quantity Supplied and Change in Supply
• Difference between Expansion in Supply and Increase in Supply
• Difference between Contraction in Supply and Decrease in Supply
• Price Elasticity of Supply : Type, Determinants and Methods
• Types of Elasticity of Supply

Chapter 9: Forms of Market

The next chapter of Class 11th Microeconomics is Forms of Market. There are four forms of the market in microeconomics, viz., Perfect Competition, Monopoly, Monopolistic Competition, and Oligopoly. The notes of this chapter cover features, characteristics, and revenue curves of the four forms of the market. 

• Market : Characteristics & Classification
• Perfect Competition Market: Meaning, Features and Revenue Curves
• Monopoly Market: Features, Revenue Curves and Causes of Emergence
• Monopolistic Competition: Characteristics & Demand Curve
• Oligopoly Market: Types and Features
• Difference between Perfect Competition and Monopoly
• Difference between Perfect Competition and Monopolistic Competition
• Difference between Monopoly and Monopolistic Competition
• Distinction between the four Forms of Market(Perfect Competition, Monopoly, Monopolistic Competition and Oligopoly)
• Long-Run Equilibrium under Perfect, Monopolistic, and Monopoly Market

Chapter 10: Market Equilibrium under Perfect Competition

A market is said to be in equilibrium when the quantity demanded is equal to the quantity supplied of the commodity. The notes of the chapter include Equilibrium Price, Equilibrium Quantity, a shift in demand and supply and equilibrium price, Special cases of equilibrium, and Simple applications of supply and demand. 

• Determination of Market Equilibrium under Perfect Competition
• Effects of Changes in Demand and Supply on Market Equilibrium
• Price Ceiling and Price Floor or Minimum Support Price (MSP): Simple Applications of Supply and Demand
• Difference between Price Ceiling and Price Floor

Important Formulas:

Important Formulas in Microeconomics | Class 11