Distinction and Interdependence Between Micro and Macroeconomics are described below:

Interdependence Between Macroeconomics and Microeconomics

Microeconomics and macroeconomics are two major branches of economics. So, they both are interdependent. Firm wise, individual wise, sector-wise, district wise study of any economic activity is microeconomics. The Overall study of all those studies is macro study. So, any change in a firm or individual or sector or district strongly affects the national or macroeconomy. But macro and microeconomics are interdependent. The objective of the study of economics cannot be fulfilled by the study of only one, microeconomics, and macroeconomics.

Dependence of Microeconomics on Macroeconomics

Microeconomics analyzes the problems and behavior of small units of the economy. All microeconomics variables are a fraction of macroeconomics variables. Macroeconomics plays an important role in the study of these aspects of microeconomics. It is explained as follows:

1 Determination of Product Pricing

No matter what type of product you sell, the price you charge your customers or clients will have a direct effect on the success of your business. Though pricing strategies can be complex, the basic rules of pricing are straightforward:

• All prices must cover costs and profits.
• The most effective way to lower prices is to lower costs.
• Review prices frequently to assure that they reflect the dynamics of cost, market demand, response to the competition, and profit objectives.
• Prices must be established to assure sales.

2 Study of Factor Pricing

Factor pricing is associated with the prices that an entrepreneur pays to help or benefit the services rendered by the factors of production. For example, an entrepreneur needs to pay wages to labor, rents for availing land, and interests for capital so that he/she can earn maximum profit. These factors of production directly affect the production process of an organization.

Dependence of Macroeconomics on Microeconomics

Macroeconomics studies the economy as a whole. For example, general price level, national income, employment. etc from the subject matter of macroeconomics. But the total is made up of parts. It can be proved as follows:

1 Study of National Income 

The national income is the sum total of the incomes of individuals, households, firms, and industries. Thus, it can not be studied without perfect information on incomes such as rent, wages, interest, and profits.

 2 Study of General Price Level

The General price level is the averages of all prices of individual goods and services.

 3 Study of Total Saving

The study of total saving also depends on the study of savings of different sectors.

          Difference between microeconomics and macroeconomics

PICTURE

These are the Distinction and Interdependence Between Micro Macroeconomics.