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Mairoon Mairoon
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6 years ago
The above figure depicts the Edgeworth box for two consumers, Al and Bruce. Explain why point "a" cannot be a competitive equilibrium.
Textbook 
Microeconomics

Microeconomics


Edition: 6th
Author:
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Replies
wrote...
6 years ago
Point "a" cannot be a competitive equilibrium because at point "a", Al and Bruce each have a different marginal rate of substitution. Since they both face the same prices in a competitive market, at least one of them is not in equilibrium.
Mairoon Author
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5 years ago
Thanks to all of you, I passed my course
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