What is microeconomic analysis? Explain in detail!

Microeconomic analysis is a study of how the behavior of individuals and business companies affects the economy This is in sharp contrast to macroeconomics, which focuses on the whole country's economy As far as individuals are concerned, the core of microeconomic analysis is how they make consumption decisions according to their income and the price of consumer products In addition, those interested in microeconomics will analyze how individual companies set production levels and how they price the goods they produce There are two ways for economic experts to analyze economic factors One method is to use the whole country's economy to analyze the impact of inflation, interest rate and employment level on the economic situation Another way is to look at the responses of individuals who make up the economy, including consumers and producers, to different economic stimuli This kind of research is called microeconomic analysis The core of microeconomic analysis is the law of supply and demand This law can also be found in macroeconomic analysis Generally speaking, the two factors are often in inverse proportion As public demand for products increases, supply will decrease In response to rising supply, demand will be reduced When the equilibrium between supply and demand is reached is the focus of micro economists The relationship between supply and demand and price level is also a major factor in microeconomic analysis Some products generate demand even when the price level rises If companies that produce these products raise prices too high, consumers will react and look for alternatives This concept, also known as demand elasticity, is crucial to macroeconomics Enterprises are also an important part of microeconomic analysis Analysts study how companies manage costs in the process of hiring labor and acquiring resources For enterprises, it is also important to set prices to maximize profits Companies must also decide when they need to change fixed inputs, such as factories or wage structures When this happens, from an economic point of view, the short-term operation will become a long-term trend, and how to adjust the price and cost in this period is an important part of microeconomics.