What does microeconomics study?

Microeconomics focuses on the behavior and decision-making processes of individual households and firms in markets. It explores how these entities make choices about resource allocation, production, consumption, and pricing. By studying these smaller economic units, microeconomics helps to understand how they interact within markets and how their decisions influence supply and demand.

This focus on individual agents allows for an analysis of market dynamics, such as competition, market failures, and the impact of regulations. In contrast, the other options pertain to broader economic concepts. For instance, studying country-wide financial systems belongs to macroeconomics, while understanding how public policies affect the economy is also a macroeconomic consideration. Global economic phenomena encompass international trade and finance, which moves beyond the microeconomic scope. Therefore, option C accurately captures the essence of what microeconomics studies.