Microeconomics is a branch of economics that studies the market behavior of individual actors (usually firms and consumers) and the aggregation of their actions in different institutional frameworks (usually the market).
Microeconomics - (from Greek prefix
mikro- meaning "small" and economics) is a branch of economics, that studies the decision-making process of individual agents such as consumers and firms, how these decisions work when aggregated and how decisions change under different rules and institutions in an attempt to understand the behavior of agents under restrictions.
Typically, it applies to markets where goods or services are bought and sold but it can be extended to households, marriages, crime and essentially any human activity. Microeconomics - in a more traditional, textbook approach - examines how decisions and behaviors affect the supply and demand for goods and services, which determines prices, and how prices, in turn, determine the quantity supplied and quantity demanded of goods and services.
One of the goals of microeconomics is to analyze market mechanisms that establish relative prices amongst goods and services and allocation of limited resources amongst many alternative uses. Microeconomics analyzes market failure, where markets fail to produce efficient results, and describes the theoretical conditions needed for perfect competition. Significant fields of study in microeconomics include general equilibrium, markets under asymmetric information, choice under uncertainty and economic applications of game theory. Also considered is the elasticity of products within the market system.
In contrast, macroeconomics is concerned about economies as a whole.