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
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