Microeconomics (redirected from Microeconomic theory)

Microeconomics

Analysis of the behavior of individual economic units such as companies, industries, or households.

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Microeconomics

The study of the behavior of individuals, companies, and industries. That is, macroeconomics studies economic decisions at the individual and small unit level. It does not look at the function of larger data sets like GDP or national debt. It is useful in helping determine what motivates individual buyers and sellers to do what they do. See also: Macroeconomics, Bottom-up investing.

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Microeconomics

What Does Microeconomics Mean?

The branch of economic study that analyzes the market behavior of individual consumers and firms in an attempt to understand their decision-making processes; it focuses on the interaction between individual buyers and sellers and the factors that influence the choices they make, particularly the trends of supply and demand and the determination of price and output in individual markets.

Investopedia explains Microeconomics

Economics can be separated into two fields of study: microeconomics and macroeconomics. Microeconomics looks at the smaller picture and focuses more on basic theories of supply and demand and how businesses make production and pricing decisions. People who are starting their own businesses or who want to learn the rationale behind the pricing of particular products and services would find this approach helpful. Macroeconomics, in contrast, looks at the big picture (hence the prefix “macro”). It focuses on the national economy as a whole and provides a basic knowledge of how things work in the business world. For example, macroeconomists analyze and interpret Gross Domestic Product or unemployment figures. This perspective provides an overall view of the entire economy. Together, microeconomics and macroeconomics are powerful tools.

Related Terms:
• Fundamental Analysis
• Gross Domestic Product—GDP
• Macroeconomics
• Quantitative Analysis
• Technical Analysis