Re: General Equilibrium

Posted by Dr. Strange on May 05, 2016; 6:39am
URL: http://discussion-forum.276.s1.nabble.com/General-Equilibrium-tp7600360p7600378.html

Demand of 1 for x= 5py/px+py
Demand of 1 for y= 5py/px+py
Demand of 2 for x= 10px/px+py
Demand of 2 for y= 10px/px+py

Total demand for x= (5py+10px)/px+py    Total supply=10
Total demand for y= (5py+10px)/px+py     Total supply=5
This gives px=0
Hence (10,5) for 1 and (0,0) for 2 is competitive as well as pareto efficient
and px=0 py=1 can be price vectors