Re: Competitive equlibrium

Posted by duck on
URL: http://discussion-forum.276.s1.nabble.com/Competitive-equlibrium-tp6202237p6211943.html

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