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Market Equilibrium (1)

  • Takashi Negishi
Chapter
Part of the Advances in Japanese Business and Economics book series (AJBE, volume 5)

Abstract

In Chap. 2, we considered how firms supply the consumables and intermediate goods and demand factors of production and intermediate goods, when prices in the market are given. Chapter 3 was devoted to show how consumers demand the consumables and supply factors of production, taking market prices as given. Aggregate demand for each good and aggregate supply of each good are, therefore, functions of market prices which are taken by competitive firms and consumers as given and unchanged. Thesemarket prices are, then, to be determined so as to equate the aggregate demand and aggregate supply of all goods. The general equilibrium of a competitive economy is defined as a set of prices which clears all the markets.

Keywords

Budget Constraint Marginal Rate Intermediate Good Competitive Equilibrium Relative Prex 
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Copyright information

© Springer Japan 2014

Authors and Affiliations

  • Takashi Negishi
    • 1
    • 2
  1. 1.The Japan AcademyTokyoJapan
  2. 2.The University of TokyoTokyoJapan

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