Microeconomics studies individual economic units such as consumers, producers, and firms. It analyzes how these units make decisions to allocate resources for production, exchange, and consumption. Microeconomics also examines how supply and demand interact to determine prices in individual markets and the interaction between different markets. It explores how goods obtain different values and how efficient production and exchange benefits both individuals and businesses.

1. MICRO ECONOMICS
• Micro means a small part of a thing. Microeconomics thus deals with a small part of the national
economy. It studies the economic actions and behavior of individual units such as an individual
consumer, individual producer or a firm, the price of a particular commodity or a factor, etc.
• Microeconomics studies the decisions of individuals and firms to allocate resources of production,
exchange, and consumption.
• Microeconomics deals with prices and production in single markets and the interaction between
different markets but leaves the study of economy-wide aggregates to macroeconomics.
• Microeconomics 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.

2. DEFINITION OF MICRO ECONOMICS
Maurice Dobb
“Microeconomics is in fact a microscopic study of the economy.”

3. MICRO ECONOMICS
• Microeconomics is the study of how individuals and companies make
choices regarding the allocation and utilization of resources. It also
studies how individuals and businesses coordinate and cooperate,
and the subsequent effect on the price, demand, and supply.
Microeconomics refers to the goods and services market and
addresses economic and consumer concerns.

4. Features of Microeconomics
• Study of Individual Units
• Price Theory
• Based on Certain Assumptions
• Use of Marginalism Principle
• Use of Marginalism Principle
• Limited Scope