The Conflict between General Equilibrium and the Marshallian Cross
31 Pages Posted: 31 Aug 2009 Last revised: 30 Jun 2012
Date Written: June 15, 2012
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 andfixed costs of joint production are suciently low.
Keywords: Curve, Partial Equilibrium, General Equilibrium
JEL Classification: D01
Suggested Citation: Suggested Citation