Microeconomics is the branch of economics that studies and analyzes the market behavior of individual businesses and consumers to help understand the decision-making process of businesses and households. It analyzes the relationships between buyers and sellers and at the same time studies the factors that influence the choices of these two parties. Many people confuse macroeconomics and microeconomics, and the main difference is that macroeconomics focuses on the broader picture. While macroeconomics focuses on the national economy as a whole and the basics of business, microeconomics focuses on just the opposite, namely supply and demand and how small businesses set price of different goods. The main building blocks of microeconomics include: Supply and demand, markets, elasticity, opportunity cost, marginal analysis and cost-benefit analysis. Supply and demand are made up of two important laws, the law of supply and the law of demand. Investopedia.com defines the law of supply as if, all else being equal, as the price of a good increases (decreases), the quantity of that good supplied will increase (decrease). The same site describes the law of demand as if, all things remaining equal, as the price of a good or service increases (decreases), the quantity of that good demanded will decrease (increase). The law of supply and demand can be demonstrated in a fairly simple graph. On the X axis you may have the quantity of a certain item such as milk, and on the Y axis you may have the price of milk. The lower the price of milk, the higher the quantity demanded, and the higher the price of milk, the lower the quantity demanded. When creating a chart of this type, the middle of paper is provided to a business in order to see where the equilibrium price is and how much it can charge to maximize demand and profit. Market elasticity is a way for producers and consumers to better understand the business world and know at what times of the year a product may show more elasticity than others. Opportunity costs, marginal analysis and cost-benefit analysis are all key tools in deciding whether the right business decisions are indeed being made and whether the negatives outweigh the positives. Knowing how to use all of these tools is necessary for anyone entering the business world, whether they run a small business like a store selling fresh dairy products or a company selling mountain bikes. Everything is linked by the principles of microeconomics and without them, businesses would not thrive as much as they are today..