The microeconomics behavior refers to
the profit-rate maximization leads to use fewer dynamics, including
the labor, even if the variable and sometimes volatile profits are high.
The microeconomics behavior corresponds to the thousands of investors,
financiers, and shareholders' financial behavior. The overall and
ever changing contrast to microeconomics behavior is tantamount to the
quarterly profit maximization which relates to investors, financiers,
and shareholders' strategic behavior. This shows in two steps.
- Through the microeconomics
behavior there are two types of firms considered: those which maximize
their net profit.
- This is the shareholders,
investor's and financiers who maximize their profit rate with the
adjustment through the observations of the microeconomics behavior.
When we compare using the microeconomics
behavior of both types of firms by respect to production and price the
rate of return and profit is evident. If the corporations and
small business is producing, the microeconomics behavior or output (and
the input consumption) of a profit-rate-maximizing firm is lower than
(or equal to) those of a pure-profit-maximizing firm; the price of output
evolves in the opposite way. The demonstration of the microeconomics
behavior is valid for the domination (higher price, lower input) and
for perfect competition (lower input); in perfect competition with fixed
coefficient of capital, the output price loses any role in the equilibrium
what implies no coordination.
The microeconomics behavior is to apply
to the case where the investment is the total capital engaged (EVA versus
ROCE) or where it is the equity (EVA versus ROE) as in part 2. Part
2 of the microeconomics behavior explores how investor's steady behavior
patterns may influence companies' objective. Two main cases involving
the microeconomics behavior examine (leaving aside the questions of
corporate supremacy or agency theory).The microeconomics behavior strategic
behavior is a forward attitude and an optimism of the market performance.
The controlling shareholders try to maintain
the microeconomics behavior of fixed trading utilizing their control
rate on corporations. The microeconomics behavior does maximize their
own net income which includes companies' distributed profit. Hence the
companies maximize their economic profit. The investors maximize the
return on their equity capital.