What does microeconomics focus on?

Microeconomics focuses on the behavior of individual households and firms, examining how they make decisions regarding the allocation of resources, pricing of goods and services, and interactions within various markets. This branch of economics analyzes the factors that influence consumer choice, production decisions by businesses, and the market dynamics that result from these interactions. By concentrating on smaller economic units rather than the economy as a whole, microeconomics provides insights into how these individual components operate, which in turn helps explain broader economic phenomena. This emphasis on individual decision-making is crucial for understanding supply and demand, market equilibrium, and the effects of various economic policies at a granular level.