© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Economics 9e by Case, Fair and Oster
General Equilibrium Analysis
Formal Proof of a General Competitive Equilibrium
Economic theorists have struggled with the question of whether a set of prices that equates supply and demand in all markets simultaneously can actually exist when there are literally thousands and thousands of markets. If such a set of prices were not possible, the result could be continuous cycles of expansion, contraction, and instability.