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Microeconomics studies basic elements in the economy including individual economic agents and markets, their interactions, and the outcomes of these interactions. Those individual agents could be firms, could be people, it could be households, buyers, and sellers.

Microeconomics deals with what choices these individual agents make, what factors influence their decisions and how their actions affect the the market by affecting the price, the supply and demand.

Microeconomics should not be confused with macroeconomics, which is the study of economy-wide things such as growth, inflation, and unemployment.

Microeconomics studies several key concepts, including (but not limited to) incentives and behaviours of individual economic agents, scarcity, supply, demand, production, cost, and competition.