Definition of Microeconomics

Microeconomics is a branch of economics that studies the behavior of individual economic units, such as households, firms, and industries, and how they make decisions regarding the allocation of scarce resources. It focuses on understanding the interactions between these economic agents in specific markets and examines how their choices influence prices, quantities, and resource allocation. Microeconomics analyzes various economic phenomena, including consumer behavior, production and costs, market structures, and the distribution of income and wealth. Its primary goal is to provide insights into the functioning of individual markets and to help policymakers and businesses make informed decisions to maximize efficiency and welfare within those markets.