The Conflict between General Equilibrium and the Marshallian Cross

31 Pages Posted: 31 Aug 2009 Last revised: 30 Jun 2012

See all articles by Ismail Saglam

Ismail Saglam

TOBB University of Economics and Technology

Asad Zaman

Al-Nafi

Date Written: June 15, 2012

Abstract

This paper illustrates on a simple model of production economy with constant returns the incoherence of the partial competitive equilibrium analysis. The conflict between the Marshallian cross and the general equilibrium, which survives under many proposed restrictions of our economic domain, can be remedied under decreasing returns technologies, when the joint production possibility is present and fixed costs of joint production are suciently low.

Keywords: Curve, Partial Equilibrium, General Equilibrium

JEL Classification: D01

Suggested Citation

Saglam, Ismail and Zaman, Asad, The Conflict between General Equilibrium and the Marshallian Cross (June 15, 2012). Available at SSRN: https://ssrn.com/abstract=1464285 or http://dx.doi.org/10.2139/ssrn.1464285

Ismail Saglam

TOBB University of Economics and Technology ( email )

Faculty of Economics and Administrative Sciences
Söğütözü Cad. 43,
Ankara, Cankaya
Turkey

Asad Zaman (Contact Author)

Al-Nafi ( email )

64 Fullerton Crecent
Markham, Ontario L35 3G5
Canada

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