Why Micro economics studies behaviour of individual economic unit?

Reasons:

The word ‘Micro Economics’ has been derived from the Greek word ‘mikros’ which means ‘small’

Micro economics splits or divides the whole economy into small individual units and then studies each unit separately in detail thereby using slicing method. It studies the economic behaviour of small individual economic units such as individual firm, individual consumer, individual producer etc. Thus, we can say that, micro economics analysis is individualistic in nature. It does not study the economic behaviour as a whole such as total national income, total national output, total consumption, aggregate investment etc. Micro economics is in fact a microscopic study of the economy.

Therefore, micro economics studies behaviour of individual economic unit.

Explain Micro economics is known as income theory.

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