economy

definition of microeconomics

Microeconomics is a very important branch of the economy that is responsible, as its name says, of those aspects that have to do with the micro, that is, the smallest or the most local of the economy. Microeconomics is very important because it is from it that we can talk about other branches of the economy such as macroeconomics (a branch that is interested in larger and broader phenomena). Without microeconomics, there would probably be no macroeconomics since it is where everything begins. Issues such as local businesses, small and medium-sized enterprises, producers, local production, the price or exchange system of a region, are all examples of phenomena addressed by microeconomics. We could say in other words that microeconomics is what is seen much more visibly in practice while macroeconomics tends to theorize about broader and more general phenomena.

Microeconomics, like every branch of the economy, is equally interested in the movement of markets since they are central to determining direct or indirect results on production or the economy. However, it does not analyze them around broad or general issues such as large multinationals or economic theories, but rather analyzes them in relation to more specific figures such as the producer or even the consumer. Thus, someone like the consumer can be of vital importance for the microeconomy since the movement of capital that it can generate is essential for various activities to be maintained. For the macroeconomy, on the other hand, the role of the consumer or even that of the producer loses much place in the face of international phenomena.

For microeconomics, consumer demand and producer supply are two important elements because they are ultimately the ones that drive the entire market. Microeconomics often deals with changes in these concepts at the local level, for example, what are the conditions that cause the demand for a type of product to change in one region, why does the supply of a service increase elsewhere, etc. .

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