Re: sau 2015.URGENT

Posted by Dreyfus on Apr 08, 2016; 8:05pm
URL: http://discussion-forum.276.s1.nabble.com/sau-2015-URGENT-tp7599776p7599777.html

Assuming that Agent A has some positive endowment, The equilibrium price
ratio is 2 because no matter what the price Agent B's demand will be an
interior solution while if price ratio turns out be greater than 2 then
Agent A will only demand Y leading to excess supply of X and excess demand
for Y and if price ratio turns out to be less than 2 then Agent A will only
demand for X leading to excess demand for X and excess supply for Y.
Therefore market clearing equilibrium price ratio is 2.