Difference Between Microeconomics and Macroeconomics
Microeconomics
Microeconomics is the study of the behavior of individuals and firms related to making decisions regarding the allocation of scarce resources and the interactions between these individuals and firms. The goal of microeconomics is to understand market mechanisms that determine relative prices among goods and services and allocate limited resources among alternative uses.
In microeconomics, the conditions under which free markets facilitate the allocation of resources are explained. The study also focuses on market failure, where markets do not produce efficient outcomes. It analyzes the economy from the bottom up.
Microeconomics, then, attempts to understand human behavior and the allocation of resources. It does not decide what changes are taking place in the market, rather, it explains why those changes are taking place.
In microeconomics, the key purpose is to identify ways for companies to maximize production and capacity, so they can lower their prices and compete in their industry. Many microeconomics principles can be found in financial statements.