# 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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### How to find the competitive equilibrium?

Consider a $2$-good, $2$-person pure-exchange economy where $A$ is endowed with $(0,5)$ and $B$ is endowed with $(5,0)$. If the utility functions are $u_A = xy$ and $u_B = \min\{x,y\}$, what are all ...
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### Second welfare theorem: can it be used to show there does not exist any competitive equilibrium? (exchange economies)

The one version of the Second Welfare Theorem states that: if there exists a competitive/Walrasian equilibrium and an endowment $X$ is Pareto efficient, then there is a price vector $\hat{P}$ for ...
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### Edgeworth Box (Non-Convex preference)

Consider a situation that agent A's indifference curves are concave, while B’s indifference curves are convex and both sets of indifference curves have exactly the same shape. A northeast movement ...
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### Production economy general equilibrium

I encountered the following economic model. Consider the following general equilibrium model with only two households, two consumer goods ($x$ and $y$) and two inputs (capital $k$ and labor $l$). ...
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### Why is the number of firms in the short run fixed?

My textbook says that in perfect competition the condition of free entry and exit only applies to the long run equilibrium. Because in the short run no new firms can enter or old ones can leave the ...
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### GE with an intermediate good

intro I'm looking at a simple model with 1 consumer, 2 goods and 2 firms. I'm trying to get a price vector [p0, p1] that makes it work. By makes it work, I mean, ...
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### Walrasian Equilibrium in A Simple Assignment (Matching) Model

I am reading Acemoglu 1996 and the Walrasian allocation in section II makes me confused. The setting is following. The economy lasts for two periods and consists of two types of agents, firms and ...
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### Quantity restriction in model with fixed factor of production

I'm trying to see the effect of a restriction on production in a model where one factor of production is perfectly elastic and the other is fixed. Specifically, suppose the production function is Cobb-...
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### free market equilbrium point, S=D confusion

I am confused over the concept of market equilbriums. let's say there is a firm X, who supplies 100 units in 1 week and the market demand is also 100 units, then Supply = Demand, and resources are ...
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### Long run equilibrium price under perfect competition

I have a problem related to Ricardian rent. I have one firm, let's call it X firm, and all of the other firms in the market. All firms have to pay some transportation costs due to their land except ...
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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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### Pareto allocations and Competitive equilibrium

Consider the one-consumer one-firm economy. The consumer has preferences over leisure $l\in(0,L)$ and consumption good $x ≥ 0$ represented by utility function $u(x, l) = ax + l$, where $a > 0$ is a ...
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### Identical aggregation

Assume the following: all firms are identical, i.e. at each time period $t$, $\forall i$, $j: F_{t}^j = F_{t}^i = F_t$ and the technology is CRS. All consumers have the same endowment of capital \$\...
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### How does "buy low, sell high" relate to supply and demand?

I'm taking introductory microeconomics, and I'm trying to consolidate my understanding by looking at some real world examples. In a perfectly competitive market, there are many consumers and suppliers ...