Define or Explain the following concepts.
2) Partial equilibrium
ANSWER:
Partial equilibrium is an equilibrium situation achieved taking into consideration only a part of the market condition. That is, it is the equilibrium with regard to an individual unit assuming the effect of other units and variables constant. In other words, it is based on the assumption of “other things remaining constant”. It neglects the interdependence among variables. Thus, microeconomic analysis is regarded as partial equilibrium.
