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:
“About the only difference between the poor and the ritch, is this, the poor suffer mizery, while the ritch hav tu enjoy it.”
—Josh Billings [Henry Wheeler Shaw] (1818–1885)
“I know not anything more pleasant, or more instructive, than to compare experience with expectation, or to register from time to time the difference between idea and reality. It is by this kind of observation that we grow daily less liable to be disappointed.”
—Samuel Johnson (1709–1784)
“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)
“No government can help the destinies of people who insist in putting sectional and class consciousness ahead of general weal.”
—Franklin D. Roosevelt (1882–1945)
“That doctrine [of peace at any price] has done more mischief than any I can well recall that have been afloat in this country. It has occasioned more wars than any of the most ruthless conquerors. It has disturbed and nearly destroyed that political equilibrium so necessary to the liberties and the welfare of the world.”
—Benjamin Disraeli (1804–1881)