Microeconomics is the study of how individuals and businesses make decisions regarding the allocation of resources and how these decisions influence the supply and demand for goods and services in specific markets. It focuses on analyzing the behavior of individual economic agents, such as consumers and firms, and how their interactions shape prices and quantities exchanged in the market. Microeconomics helps us understand the intricacies of decision-making at a smaller scale, providing insights into issues like pricing, production, consumption, and market efficiency.