I work as an international e-commerce platform manager and a key microeconomic principle I monitor is exchange rate fluctuations. These fluctuations can significantly impact the product prices, deals and offers that we roll out. For instance, as the local currency strengthens and product prices tend to rise globally, impacting sales. Also, I regularly adjust our pricing and marketing strategies in response to the availability of products and their demand. This might include offering promotions or discounts for a particular interval time to remain competitive in the online marketplace. By closely monitoring exchange rates and responding swiftly, our organisation is able to protect our profit margins and ensure sales in different marketing domains globally.
An example of a microeconomic principle with macroeconomic application is a tax increase. A rise in taxes is a macroeconomic policy that, if implemented, will affect the whole economy. However, a microeconomic analysis will determine how the tax hike reaches into the pocket of certain people. For example, if taxes are increased and this closes the budget deficit, aggregate demand will fall due to less consumer spending. Two macro indicators of this fall in aggregate demand could be the decline in employment and production. However, a microeconomic analysis examines how this tax hike affects specific businesses. Then a firm would be forced to make microeconomic adjustments to pricing and production levels due to the increasing tax burden. In this case, the microeconomic theory of supply and demand directly affects the macroeconomic indices of employment and production. Take the microeconomic decision of the firm to adjust its production levels in response to the increase in the tax.