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Definition of Microeconomics
The subject of Economics can be divided into two branches: Macroeconomics and Microeconomics. While Macroeconomics is concerned with the broader picture, that is, it deals with the entire economy as a whole, Microeconomics focuses on individual entities.
‘Micro’ comes from the Greek word ‘Mikro ́s’ meaning small. Hence Microeconomics is concerned not with the market as a whole but with the smaller units that make up the market. It studies the behavior of individual consumers, households or firms in the market in order to understand their process of decision making. It analyzes the interactions between individual sellers and purchasers and the factors that influence their decisions. It is also concerned with demand and supply patterns, price and output determinations in individual markets. To learn Economics, one has to start off with the concepts of Microeconomics before they can comprehend the larger scenario.
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