What is microeconomics?
Microeconomics is the study of how individuals, households and companies make decisions to allocate their resources. It normally applies to goods and services, markets, or individual finance.
Microeconomics focuses on responses to changes in incentives, prices, resources, and methods of production. It shows how and why different goods have different values, how individuals and businesses conduct and benefit from efficient production and exchange, and how individuals best coordinate and cooperate with one another.
Microeconomists formulate various types of models based on logic and observed human behaviour, and test them against real-world observations to allocate resources of production, exchange, and consumption.
Unlike macroeconomics, which involves the study of economy-wide aggregates, microeconomics deals with prices and production in single markets, and the interaction between different markets.