Microeconomics, comprising of a set of principles that govern production, exchange and consumption of goods and services, is the foundation of the entire economic theory. The study of economics begins with microeconomic analysis because it deals with those fundamental laws which help in optimum allocation of economic resources and, hence, price determination for goods and services including factors of production. This is the core or central theme of the economic theory as a whole. This book is meant for all students interested in economic theory whatever be their areas of specialization. Primarily it is meant for undergraduate students of engineering and economics but the honours and post-graduate students of economics are also likely to be benefited much by the material presented in the book. Based on premises observed in reality the theorems or laws or principles are derived to explain the nature of the real world of economic activities. The approach followed in the book is analytical in nature. Emphasis has been given on adequate explanation of the theories using graphs and mathematics. The level of mathematics used is not high. Some knowledge of algebra and calculus is adequate to understand the material presented in the book. A synthesis of the neo-classical and modern approaches has been attempted in the book to make it a complete textbook of the subject.