Micro economics (Price theory) analyses the patterns of supply and demand so as to determine the price and output in the individual markets. The theories of product pricing and factor pricing help an entrepreneur in various ways. The price mechanism helps the businessmen to determine the prices of their goods and services. It also helps them to take important decisions related to cost of production. Moreover, by using this theory, the businessmen can efficiently allocate their resources as well as forecast the factors of demand for their product.
Thus, price theory is very useful to businessmen.