Difference Between Partial and General Equilibrium
| Partial Equilibrium | General Equilibrium |
|---|---|
| • Developed by Alfred Marshall. | • Léon Walras was first to develop it. |
| • Related to single variable | • More than one variable or economy as a whole is taken into consideration |
• Based on two assumptions-
|
• It is based on the assumption that various sectors are mutually interdependent.
There is an effect on other sectors due to change in one. |
| • Other things remaining constant, price of a good is determined | •Prices of goods are determined simultaneously and mutually.
Hence all product and factor markets are simultaneously in equilibrium. |
Read more about this topic: Partial Equilibrium
Famous quotes containing the words difference between, difference, partial, general and/or equilibrium:
“The difference between people isn’t in their class, but in themselves. Only from the middle classes one gets ideas, and from the common people—life itself, warmth. You feel their hates and loves.”
—D.H. (David Herbert)
“Man is the only animal that laughs and weeps; for he is the only animal that is struck with the difference between what things are and what they ought to be.”
—William Hazlitt (1778–1830)
“It is characteristic of the epistemological tradition to present us with partial scenarios and then to demand whole or categorical answers as it were.”
—Avrum Stroll (b. 1921)
“What is written without effort is in general read without pleasure.”
—Samuel Johnson (1709–1784)
“There is a relation between the hours of our life and the centuries of time. As the air I breathe is drawn from the great repositories of nature, as the light on my book is yielded by a star a hundred millions of miles distant, as the poise of my body depends on the equilibrium of centrifugal and centripetal forces, so the hours should be instructed by the ages and the ages explained by the hours.”
—Ralph Waldo Emerson (1803–1882)