If demand varies continuously with price, then even if there are thousands of goods, there will be at least one set of prices such that demand equals supply in every market.

Question

Quizplus · Accepted Answer

This statement is equivalent to the existence of a general equilibrium in the economy, which is a well-established result in the theory of competitive markets. Under certain assumptions, including continuous demand functions, the existence of a general equilibrium can be proven mathematically. This means that there is a set of prices for all goods such that all markets clear (i.e., demand equals supply) simultaneously.

If Demand Varies Continuously with Price, Then Even If There