OMTEX CLASSES: Partial equilibrium and General equilibrium.

Partial equilibrium and General equilibrium.

Partial equilibrium and General equilibrium.


PARTIAL EQUILIBRIUM
GENERAL EQUILIBRIUM
Meaning:

Partial equilibrium is a type of equilibrium used in microeconomics, which explains the dquilibuium of a particular unit of an economy.

Nature:

Partial equilibrium neglects the functional relationship and interdependence betweeen the economic variables by assuming ‘other things being constant’
Meaning:

General equilibrium is a type of equilibrium used in macroeconomics, which explains the equilibuium of the entire evonomy.



General equilibrium assumes the functional relationship and interdependence between the ecomic variables by assuming ‘everything depends on everything else’