What is analyzed within microeconomics?

Microeconomics focuses on the behavior of individual markets and the decision-making processes of consumers and firms. It studies how these entities interact within specific markets to determine supply and demand, price levels, and the allocation of resources. By analyzing how individual consumers make choices based on their preferences and constraints, as well as how businesses respond to those choices in terms of production and pricing, microeconomics provides insights into market mechanisms at a localized level. This analysis is distinct from macroeconomics, which deals with broader economic factors like national debt, inflation rates, and global trade, emphasizing the overall performance and structure of an economy rather than its individual components. Understanding the interactions in specific markets allows economists to make predictions about market behavior and the impacts of various economic policies or changes.