Distinguish between the following Partial equilibrium and general equilibrium

Distinguish between the following

Partial equilibrium and general equilibrium

ANSWER:


Basis of Difference
Partial Equilibrium
General Equilibrium
1. Definition
Partial equilibrium refers to equilibrium in one market, assuming that there is no change in other markets
General equilibrium is the method of studying equilibrium in different markets simultaneously.
2. Uses
It is used in microeconomics.
It is used in macroeconomics.
3. Assumption
It assumes that other things remain constant.
It assumes that the variables are dependent on each other.
4. Process
It isolates an individual unit from other forces.
It explains the inter relationship and interdependence between aggregate economic variables.

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