# Questions tagged [competitive-equilibrium]

The study of equilibrium when individual agents have no power to influence market-level variables like prices or quantities.

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In their book "Radical Markets", the authors (Posner and Weyl) suggest a market for votes, where citizens can freely buy and sell their votes. But there is a catch: in order to have $k$ ...
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### Why is the competitive equilibrium price not well defined in this question?

Consider a market demand function p = 100 − q, where p is market price and q is aggregate demand. There is a large number of firms with identical cost functions ...
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### Competitive equilibrium in a two-person economy with substitutes and complements

Recently came across this question on a microeconomics test and there was something that did not sit quite right with me. In an economy with two agents, A and B, and two goods, milk and honey, the ...
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### Finding the competitive equilibrium in an exchange economy with two perfect complements

I am currently in a Microeconomics class and have come across the problem described below. I have tried to solve the problem algebraically but only get to the intercept (x1a,x2a)=(8,4). I know that ...
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### Find the competitive equilibrium of the following economy

The following question was given as a part of a task in microeconomic theory course. It is not from some textbook and since I still haven't figured a way to solve it I will leave it here. Thank you in ...
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### How is it possible to have perfect balance of supply and demand?

How is it possible to have perfect balance of supply and demand? That is, e.g. the right amount of workforce compared to the amount of work. Background (as asked by Giskard in the comments): It's ...
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### Competitive equilibrium: how to define histories on continuous space?

In the usual setup for the competitive equilibrium we have the agent solve: $$\max_{\{c_i(h^t)\}} \sum_{t=0}^\infty \sum_{h^t} \beta ^t u(c(h^t)) \pi(h^t)$$ subject to constraints, where $h^t$ ...
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### Competitive Equilibrium how to determine subject to functions

Consider a 1-commodity, 2-consumers, 2-periods economy with S = 2, J = 1. The asset pays one unit (of the commodity) in state 1 and 2 units in state 2. q denotes the price of the asset at time 0. The ...
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### Exchange economy with two agents, what's the competitive equilibrium?

I'm currently doing this assignment but I'm keep getting stuck by this question. I put the Lagrange function for both agents and get the MRS / Price ratio but what should I do from there?
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### How to find the Walrasian equilibrium for non monotonic utility functions?

I just say Amit's comment on this question: The second welfare theorem without monotonicity so I got curious and tried to find both the contract curve for that particular problem, and the Walrasian ...
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### How do economists explain "If You Want to Win, Tell Your Team It’s Losing (a Little)." along with self-efficacy

How do economists explain: "If You Want to Win, Tell Your Team It’s Losing (a Little)." ? I read this article. And I learnt that— "The relationship between the score and the likelihood ...
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### Show that the long-run supply curve of an increasing cost industry in perfect competition is upward sloping

Many intermediate microeconomics textbooks teach us that in perfect competition, the long-run supply curve of an increasing cost industry is upward-sloping. However, They usually give some hand-waving ...
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### What are the best theoretical or empirical defenses of equilibrium analysis in economics?

An Anarchist FAQ (see Wikipedia page here) focuses its opposition to mainstream economics by criticizing equilibrium analysis. The FAQ notes that, [Equilibrium analysis] is essentially a static tool ...
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### Short, Medium and Long-Run Profit Maximization

Suppose that, in a perfectly competitive industry, the firms' technology have the following cost function: $C(x) = 100 + 3x + 0.04x^2$. Assume the fixed costs are sunken. a) If the demand for the ...
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### Lecture notes competitive labor market with minimum wage

Can somebody recommend lecture notes that derive competitive labour market model equilibrium with minimum wages? This has been surprisingly hard to find, because most lecture notes use minimum wages ...
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### Competitive wages under imperfect information

Do competitive wages always have to be defined by marginal productivity? Can we have competitive wages which are not based on productivity, when the information is not perfect? To put it in context, ...
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### Competitive equilibrium with IRTS

Suppose we have a static economy with one firm and one consumer. Consumer owns the firm and decides on how much to consume and to work: $$\max U(c,1-n_s)\ \text{s.t.} \ pc\leq wn_s+\pi$$ The firm is ...
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Consider a production economy with $L$ goods, a single consumer and a single producer whose production set are given by $Y\subset R^L$. Question is to find the existence condition of equilibria of ...