Watson says, "Microeconomics is the theory of the small, of the behaviour of the consumers, producers and markets.'
- In the words of Shapiro, "Microeconomics deals with small parts of the economy.
- According to Ieftwitch, ^Microeconomics is concerned with the economic activities of economic units as consumers, resource owners and business firms."
- According to Boulding, "Microeconomics is the study of particular firm, particular household, individual price, wage, income, industry and particular commodity."
Microeconomics is the study of decisions that people and businesses make regarding the allocation of resources and prices of goods and services. This means also taking into account taxes and regulations created by governments. Microeconomics focuses on supply and demand and other forces that determine price levels for specific companies in specific industry sectors.
For example, microeconomics would look at how a specific company could maximize its production and capacity so it could lower prices and better compete in its industry.
Eg: - talks about the individual tree but not about total forest
It helps in decision making regarding utilization of resources in the organization.
It helps in which goods should be produced & who will produce them.
How should be produced and how they will be distributed.