Importance of Micro economics
Micro-economics occupies it very important place in the study of economic theory. It has both theoretical and practical importance. From the theoretical point of view, it explains the functioning of a free enterprise economy. It or consumers and decisions about the allocation of produce resources among millions of good and services It explain how through market produced in the community explains the determination of the the various products and productive explains the conditions of inefficiency consumption and production and departure optimum. As for practical importance. mi r economics helps in the formulation or policies calculated to promote efficiency in product and the of the masses.
Thus, positive and nonnative. It not only tells us how the economy operates but also how it should be operated to promote general welfare. In Professor Lerner’s words. Micro-economic theory facilitates the understanding or what would be a complicated contusion of facts by constructing simplified models of behavior.
Micro-economic analysis is also applicable to the various branches of economics such as public finance, international trade.
Militia analysis suffers from certain limitations the functioning of the individual industry may he Murillo, tire economy as whole may be pointed out employment at any rate In the actuality world.