<p>The picture below presents the competitive equilibrium in different situations:</p>
<p><a href="https://i.sstatic.net/bZeDbejU.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/bZeDbejU.png" alt="enter image description here" /></a></p>

CC BY-SA 4.0
2024-05-27T13:29:41.570Z
This is literally a set of formulas and image shared without source or attribution, close to zero knowledge is imparted...
Giskard
CC BY-SA 4.0
2024-05-27T13:31:28.343Z
Any job that requires you to solve problems according to formulas can (and will) be performed by a program. Are you preparing people for these jobs? Or are you a firm believer in the unfairness of the testing system, and think that all students should get a passing grade?
Giskard
CC BY-SA 4.0
2024-05-27T13:37:51.350Z
I created this picture. Do I also need to mention that when I create the picture? Carefully going through the picture explains why three cases are needed. This is an old question with no useful answer. I posted it because I believe that this is a useful answer.
Amit
CC BY-SA 4.0
2024-05-28T02:59:39.773Z
It's nice that you created the picture; my point was that if it came from a textbook or something one could at least go the source to read the surrounding text and get the theory, not just the formula. Missing a theoretical explanation I find the statement "*Carefully going through the picture explains why three cases are needed.*" astonishing.
Giskard
CC BY-SA 4.0
2024-05-28T03:29:42.330Z
You are welcome to write a complete theoretical answer of your own in a new answer. In my opinion, my answer has sufficient graphical explanation - "[A picture is worth a thousand words](https://en.wikipedia.org/wiki/A_picture_is_worth_a_thousand_words)" Thanks for your inputs/comments/suggestions.
Amit
CC BY-SA 4.0
2024-05-28T04:38:58.580Z
Inspiring quote! If I take a screenshot of my comment and post that would you find it more convincing though? If not, perhaps we should not follow the phrase blindly.
Giskard
CC BY-SA 4.0
2024-05-27T13:28:01.860Z
2024-05-27T13:28:01.860Z
Amit
<p>Consider the following Edgeworth economy. There are two consumers <span class="math-container">$i \in {1,2}$</span> and two goods x and y. Consumer <span class="math-container">$i$</span> consumes <span class="math-container">$(x_i,y_i)$</span>, where <span class="math-container">$x_i ≥0$</span> and <span class="math-container">$y_i ≥0$</span>. Endowments are <span class="math-container">$ω_1 =(a,0)$</span> and <span class="math-container">$ω_2 =(0,b)$</span>,where a&gt;0 and b &gt; 0. That is, consumer 1 is endowed with good x and consumer 2 is endowed with good y. We are given <span class="math-container">$u_1=\min\{x,y\}$</span> and <span class="math-container">$u_2=\min\{x,2y\}$</span>. I need to find the competitive equilibrium and draw the offer curves. What I got so far based on MGW ch.15,pg:515-525 is find the offer curves for both consumers and my results are:</p>
<p><span class="math-container">$OC_1=(\frac{P_1a}{P1+P_2},\frac{P_1a}{P1+P_2})$</span></p>
<p><span class="math-container">$OC_2=(\frac{2P_2b}{2P1+P_2},\frac{P_2b}{2P1+P_2})$</span> (if I haven't made any mistakes in calculations).</p>
<p>From that we determine the walrasian eq. prices by equaling <span class="math-container">$\frac{P_1a}{P1+P_2}+\frac{2P_2b}{2P1+P_2}=a(=\omega_{11}+(\omega_{12}))$</span> and get that <span class="math-container">$\frac{P_1^*}{P_2^*}=\frac{a-2b}{2(b-a)}$</span> again if I haven't done any miscalculations.</p>
<p>Is this the correct way of getting the competitive equilibrium?</p>

<microeconomics><competitive-equilibrium><edgeworth-box>
Computing the competitive equilibrium from the edgeworth box
Maybeline Lee
# Computing the competitive equilibrium from the edgeworth box

(Asked by: username_0 on 2021-09-04)

Consider the following Edgeworth economy. There are two consumers $i \in {1,2}$ and two goods x and y. Consumer $i$ consumes $(x\_i,y\_i)$, where $x\_i ≥0$ and $y\_i ≥0$. Endowments are $ω\_1 =(a,0)$ and $ω\_2 =(0,b)$,where a>0 and b > 0. That is, consumer 1 is endowed with good x and consumer 2 is endowed with good y. We are given $u\_1=\min\{x,y\}$ and $u\_2=\min\{x,2y\}$. I need to find the competitive equilibrium and draw the offer curves. What I got so far based on MGW ch.15,pg:515-525 is find the offer curves for both consumers and my results are:

$OC\_1=(\frac{P\_1a}{P1+P\_2},\frac{P\_1a}{P1+P\_2})$

$OC\_2=(\frac{2P\_2b}{2P1+P\_2},\frac{P\_2b}{2P1+P\_2})$ (if I haven't made any mistakes in calculations).

From that we determine the walrasian eq. prices by equaling $\frac{P\_1a}{P1+P\_2}+\frac{2P\_2b}{2P1+P\_2}=a(=\omega\_{11}+(\omega\_{12}))$ and get that $\frac{P\_1^\*}{P\_2^\*}=\frac{a-2b}{2(b-a)}$ again if I haven't done any miscalculations.

Is this the correct way of getting the competitive equilibrium?

**Tags:** microeconomics, competitive-equilibrium, edgeworth-box


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## 1 answers

### Answer by username_1 on 2024-05-27. Score: 1

The picture below presents the competitive equilibrium in different situations:

[![enter image description here](https://i.sstatic.net/bZeDbejU.png)](https://i.sstatic.net/bZeDbejU.png)

> **Comments:**
> **username_2**: This is literally a set of formulas and image shared without source or attribution, close to zero knowledge is imparted...  
> **username_2**: Any job that requires you to solve problems according to formulas can (and will) be performed by a program. Are you preparing people for these jobs? Or are you a firm believer in the unfairness of the testing system, and think that all students should get a passing grade?  
> **username_1**: I created this picture. Do I also need to mention that when I create the picture? Carefully going through the picture explains why three cases are needed. This is an old question with no useful answer. I posted it because I believe that this is a useful answer.  
> **username_2**: It's nice that you created the picture; my point was that if it came from a textbook or something one could at least go the source to read the surrounding text and get the theory, not just the formula. Missing a theoretical explanation I find the statement "*Carefully going through the picture explains why three cases are needed.*" astonishing.  
> **username_1**: You are welcome to write a complete theoretical answer of your own in a new answer. In my opinion, my answer has sufficient graphical explanation - "[A picture is worth a thousand words](https://en.wikipedia.org/wiki/A_picture_is_worth_a_thousand_words)" Thanks for your inputs/comments/suggestions.  
> **username_2**: Inspiring quote! If I take a screenshot of my comment and post that would you find it more convincing though? If not, perhaps we should not follow the phrase blindly.  

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