Partial- equilibrium analysis is a legitimate method of analysis if the market being studied
A) is in the manufacturing sector of the economy.
B) is large relative to the entire economy such that the feedback effects are obvious to the analyst.
C) is small relative to the entire economy, such that feedback effects on the market being studied are significant.
D) is in the financial sector of the economy.
E) is small relative to the entire economy, such that feedback effects on the market being studied are small.

Question

Quizplus · Accepted Answer

Partial-equilibrium analysis is appropriate when the market is small relative to the entire economy, so that feedback effects on the market being studied are negligible.

Partial- Equilibrium Analysis Is a Legitimate Method of Analysis If