Differences between micro and macro economics

Micro economic is a branch of economics which focuses on the market attitude of the individual customers and organizations which enables the business to understand the market behavior in micro perspective. Micro economics enables the business organizations to take decisions on the smaller and critical aspects; it also takes the factors affecting such decisions into consideration. It was Adam Smith - the father of economics who did an elaborative analysis on these concepts that is micro and macro economics. Micro economics today is become an important branch of study in the field of economics and business.

The following points will highlight the importance of micro economics:

It enables in establishing a method which can analyze individual economic forces

The market behavior of the consumers can be understood which is very much helpful in decision making through micro economics

It also lead to understanding of the individual supply and demand determinants of the market

Now let us take look at what macro economics means. Macro economics is that branch of economics which studies the economics in a broader sense for example it deals with national income of the country or the buying behavior of the Indians and foreign trade position of India. Here the behavior of the economy is studied as a whole and as matter of fact both macro and micro economics are very inter-dependent in nature and both influence in decision making and strategy formulating of an organization.

Though they are interdependent they are still different from one another and the following points will justify their differences:

Micro economics studies the individual behavior that is it studies the consumption behavior or attitude of a consumer whereas macro economics on the other hand studies the overall market structure, that is enables the organization to understand the size and capacity of the market.

The demand in micro economics directly depends on the individual's expectations where as in micro economics the demand depends on the organization's expectations.

In the pricing method micro economics concerns with the price of a individual product whereas in macro economics the overall production costs is considered

Taxation is another example which determines the difference between these two fields of economics. Micro economics deals with the individual's tax aspects where macro economics deals with the overall tax aspects of the country.

Therefore by looking at the above differences between micro and macro economics we can conclude that both these approaches towards the field of economics today occupy a valuable niche.

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