Partial equilibrium analysis differs from general equilibrium analysis in that:
A)a partial equilibrium analysis studies the determination of price and output determination, whereas general equilibrium includes a greater number of variables.
B)prices are not held constant in all other markets in partial equilibrium, but in general equilibrium they are.
C)a partial equilibrium analysis studies the determination of price and output in a single market, whereas general equilibrium looks at more than one market simultaneously.
D)a general equilibrium holds prices constant in multiple markets, whereas partial equilibrium does not.

Question

Quizplus · Accepted Answer

Partial equilibrium analysis only considers the determination of price and output in a single market, while general equilibrium analysis looks at multiple markets simultaneously. Partial equilibrium analysis focuses on the determination of price and output in a single market, while general equilibrium analysis looks at multiple markets simultaneously. Prices are not held constant in all other markets in partial equilibrium, but in general equilibrium analysis, they are. Therefore, option C is the correct answer.

Partial Equilibrium Analysis Differs from General Equilibrium Analysis in That