Walrasian Equilibrium or Disequilibrium

Initializing live version
Download to Desktop

Requires a Wolfram Notebook System

Interact on desktop, mobile and cloud with the free Wolfram Player or other Wolfram Language products.

This plot represents a pure exchange economy of two consumers with Cobb-Douglas preferences. The set of Pareto optimal allocations is shown in the Edgeworth box (green line). Given the price, the consumption set passes through the endowment (black dot); the orange and blue points are the associated demand points for consumers 1 and 2 respectively. When there is an excess demand on good , the orange point is to the right of the blue one; when there is an excess demand on , the orange point is higher than the blue one. Walrasian equilibrium price makes both consumers' demands coincide.

Contributed by: Loreto Llorente (March 2011)
Open content licensed under CC BY-NC-SA


Snapshots


Details

detailSectionParagraph


Feedback (field required)
Email (field required) Name
Occupation Organization
Note: Your message & contact information may be shared with the author of any specific Demonstration for which you give feedback.
Send