Relative prices answer the fundamental question in a market economy of what, how, in what quantity, and for whom goods are produced. They guide the decisions of households and businesses regarding supply and demand for goods. The goods are traded in markets that function more or less effectively. The authors clearly and methodically explain household and business theory, optimal allocation under perfect competition, and various forms of imperfect competition. The 4th revised edition is particularly recommended for undergraduate studies due to its pedagogically skillful structure.