An analysis that determines the equilibrium prices and quantities in one market holding constant prices in all other markets is called:
A)partial equilibrium analysis
B)general equilibrium analysis
C)externality analysis
D)market equilibrium analysis

Question

Quizplus · Accepted Answer

Partial equilibrium analysis examines the equilibrium prices and quantities in one specific market while assuming prices in all other markets are constant. This approach is useful for analyzing the behavior of individual markets and can help identify market failures or inefficiencies. Partial equilibrium analysis focuses on analyzing one specific market while holding constant the prices in all other markets. This allows for a more focused and detailed understanding of the market in question and is the best choice for determining equilibrium prices and quantities in that market. General equilibrium analysis, on the other hand, considers the interactions between multiple markets and is more complex. Externality analysis focuses on the external effects of economic activities and does not directly relate to determining equilibrium prices and quantities in a market. Market equilibrium analysis is a broad term that can refer to any analysis of market equilibria, but partial equilibrium analysis is the specific type of market equilibrium analysis that is relevant in this context.

An Analysis That Determines the Equilibrium Prices and Quantities in One