Micro economics:

Micro is a Latin word which means one millionth part or very small part. Making analysis of individuals in economics is called micro economics.


For example: Discussion of a single tree in whole forest e.g. consumer’s behavior, price mechanism, firm’s behavior, distribution of wealth etc.

The factors which we will discuss in micro economics are as follows:

Consumer’s behavior:

Consumer behavior in market is analyzed that how individuals satisfies their maximum wants with limited resources.

Price mechanism:

In it we discuss how to bring equilibrium between demand and supply of a goods.

Firm’s behavior:

In this part of micro economics we discuss that how a firm can achieve maximum profit.

Distribution of wealth:

In micro economics we also discuss that how money can be distributed among four factors of production e.g. rent, wages, interest, and profit. These all factors are defined as follows:


Getting money through a property is called rent.


Wage is getting money as a reward on doing some sort of mental or physical work.


Interest is charging extra money on loan.


Profit is getting more money by investing some wealth in any business.


Share this



About Us

Guidanceportal is a place to learn “the Knowledge” not mere information. Our vision is to spread knowledge of different fields of study and provide guidance in the most simplest and self explanatory way. Our team consists of skillful personnel working in different fields of life who share their practical experience and knowledge.

We understand the importance of continuous refinement & improvement thus your participation in the form of comments will be highly appreciated.

Guidanceportal Team