Re: dse 2004 .. duck pls see

Posted by Sumit on Jun 19, 2013; 11:11am
URL: http://discussion-forum.276.s1.nabble.com/dse-2004-duck-pls-see-tp7582513p7582592.html

Hi Duck,
Could you plz tell the right approach to get competitive equilibrium prices in q-6????..Is it can be done by hit and try only???

My approach
Agent-1 Demand for x1=999px/px+py
Agent-2 demand for x2=1000py/px+py

Now,For competitive equilibrium, Total demand for commodity x must equal to total supply.
==>[999px/px+py]+[1000py/px+py]=999.
Now, In this case as I put px=1 & Py=0...above equality satisfy.

At this price competitive equilibrium:  x1=999 and y1 belong [999,1000].