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 only difference between the saint and the sinner is that every saint has a past, and every sinner has a future.”
—Oscar Wilde (1854–1900)
“There is singularly nothing that makes a difference a difference in beginning and in the middle and in ending except that each generation has something different at which they are all looking. By this I mean so simply that anybody knows it that composition is the difference which makes each and all of them then different from other generations and this is what makes everything different otherwise they are all alike and everybody knows it because everybody says it.”
—Gertrude Stein (1874–1946)
“And meanwhile we have gone on living,
Living and partly living,
Picking together the pieces,
Gathering faggots at nightfall,
Building a partial shelter,
For sleeping and eating and drinking and laughter.”
—T.S. (Thomas Stearns)
“The general will is always right.”
—Jean-Jacques Rousseau (1712–1778)
“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)