MICROECONOMICS

study of the economic behaviour of individual consumers, firms, and industries and the distribution of total production and income among them. It considers individuals both as suppliers of labour and capital and as the ultimate consumers of the final product, and it analyzes firms both as suppliers of products and as consumers of labour and capital. Microeconomics seeks to analyze the market or other type of mechanism that establishes relative prices among goods and services and allocates society's resources among their many alternative uses. Compare macroeconomics.