What is difference between partial and general equilibrium?
Answers
Answer:--
-----> Partial equilibrium exists when an equilibrium relates to a single variable. For instance variable of a firm.
-----> General Equilibrium when an equilibrium relates to number of variables or economy as a whole.
Answer:
Partial equilibrium is a condition of economic equilibrium which takes into consideration only a part of the market, ceteris paribus, to attain equilibrium. As defined by Leroy lopes, "A partial equilibrium is one which is based on only a restricted range of data, a standard example is price of a single product, the prices of all other products being held fixed during the analysis." The supply and demand model is a partial equilibrium model where the clearance on the market of some specific good.Applications of partial equilibrium discusses, when does an individual, a firm, an industry, factors of production attain their equilibrium points- A consumer is in a state of equilibrium when they achieve maximum aggregate satisfaction on the expenditure that they make depending on the set of conditions relating to his tastes and preferences, income, price and supply of the commodity etc. Producers’ equilibrium occurs when they maximize their net profit subject to a given set of economic ...In partial equilibrium the welfare effects on consumers who purchase and the producers who produce in the market is distinguished by consumer surplus and producer surplus.
Explanation:
The main difference of partial equilibrium and general equilibrium is the determination of price and quantity in the market where by partial deal with only one market while general deal with the market in the economy and their interaction.he above-mentioned points relate to a perfectly competitive market but can be further extended to monopolistic competition, oligopoly, monopoly and monopsony markets.