For decades, business journalists have focused their attention on major companies. News organizations are now beginning to recognize the role of entrepreneurs and the value of small business, the leading generator of jobs in the U.S. economy Journalists are trying to improve and expand coverage of entrepreneurship and small business at a challenging time. Entrepreneurs are creating new companies at a rapid pace. Financed by bolder venture capitalists, small businesses are also growing faster. To adequately cover these changes, journalists need to understand microeconomics - the activity and behavior of people and organizations in particular markets.

In a two-part backgrounder, Karen Hallows provides fundamentals to help journalists analyze economic issues relating to the information economy, entrepreneurship and small business. She covered the principles known as "risk and return," "marginal benefits and marginal costs," "opportunity costs" and "sunk costs" in Part One. In Part Two, Hallows explains "supply and demand," "elasticity of demand," "differential pricing" and provides related tips and sources for journalists.