Question

Distinguish between Walras general equilibrium approach and Marshall partial equilibrium approach in essay around 1000 words to 2000 words ( 30 marks)

Answer 1

As we know that in pricing under perfect competition, there are two main approaches to equilibrium.

Partial Equilibrium analysis given by famous English econmist Alfred Marshall and another is General Equilibrium analysis given by Walras. In Marshal's partial Equilibrium analysis, we seek to explain the price determination of commodity, keeping the prices of other commodities constant and also assuming that the various commodities are not interdependent. General equilibrium analysis deals with inter-relationship and inter-dependence between equi­librium adjustments with each other. General equilibrium exists when at the going prices, the quanti­ties demanded of each product and each factor are equal to their respective quantities supplied.

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