Skip to main content
3 votes

Find the competitive equilibrium of the following economy

There will be no equilibrium. Both technology and endowment play no role in the argument. Assume there would be an equilibrium with price system $(p_1,p_2,p_3)$. Notice that all prices must be ...
Michael Greinecker's user avatar
2 votes
Accepted

Why is the competitive equilibrium price not well defined in this question?

Solution: Your approach is right but it wont work in this situation as there are certain avoidable fixed costs associated with your cost function. we are given the demand function as, $p^d(q)=100-q$ (...
SGP's user avatar
  • 181
1 vote
Accepted

Competitive equilibrium in a two-person economy with substitutes and complements

Given the economy with two consumers: $u_1=\min(2m_1,h_1)$ and $u_2=m_2+h_2$ with endowment allocation $E=((60,40),(40,60))$, we observe the case where the price ratio is $\frac{p_M}{p_H}\in (0,1)$. ...
Amit's user avatar
  • 9,106
1 vote

Finding the competitive equilibrium in an exchange economy with two perfect complements

Given a pure-exchange economy with $u_A(x_A,y_A)=\min(x_A,2y_A)$, $u_B(x_B,y_B)=\min(2x_B,y_B)$ Endowment of A is $(k_X,k_Y)$ and of B is $(12-k_X,12-k_Y)$ Set of feasible allocations is $\mathcal{F}...
Amit's user avatar
  • 9,106
1 vote

Competitive Equilibrium how to determine subject to functions

The endowment for individual 1 is $(4,0,1)$. The price for the asset is $q$ and assume individual 1 buys $\theta$ units of the asset at period 0. Then the total amount of money left in period 0 is: $$ ...
tdm's user avatar
  • 12.5k
1 vote

Computing the competitive equilibrium from the edgeworth box

The picture below presents the competitive equilibrium in different situations:
Amit's user avatar
  • 9,106
1 vote

Pure exchange economy: Set of multiple equilibria endowments

The following article: TODA, A.A. and WALSH, K.J., 2017. Edgeworth box economies with multiple equilibria. Economic Theory Bulletin, 5(1), pp. 65-80. though not focusing on the properties of the ...
Jovan Jezdic's user avatar

Only top scored, non community-wiki answers of a minimum length are eligible