Competitive equlibrium

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Competitive equlibrium

vaibhav
what is the method to find out competitive eq. in gen eq questions.

ex - endowment (XY) of agent A and B is 1000,0 and 0, 1000 respectively utilith function for A = min(x,y)
For B (1000-Xo, 1000-Yo )

Find comp eq.

options..
x=y=500
x is from( 0, 100), x=y

Plz help
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Re: Competitive equlibrium

duck
Hello vaibhav.. :)

for the given economy, a competitive allocation is tht allocation where,
1>for a given price, each consumer is maximising his utility such tht value of endownmnt equals value of good they are demanding.. and
2>demand = supply for all commodities.. (or markets clear)


You can either plot IC in edegeworth box or
you can simply find out individual demand  and then check at what price ratio , demand by both of them = endownment
:)