Example of microeconomics and macroeconomics ?

• Microeconomics deals with individuals whereas macroeconomics deals with the economy as a whole entity consisting of collective individual units.
• Macroeconomics uses aggregate demand and aggregate supply to explain it’s concepts whereas microeconomics employs demand and supply.

Microeconomics explains that to earn maximum profit producers should decrease supply when prices are low and increase supply when prices are high, but if all individual suppliers decrease the supply of a commodity, then collectively the overall supply would change, and this will have effects on income, expenditure, taxation policies etc. Thus to overcome the shortcomings of microeconomic theory, the macroeconomic theory came into existence which focuses on aggregates and discusses the welfare of the economy as a whole.