Given below are two statements: one is labelled as Assertion A and the other is labelled as Reason R. Assertion A: General equilibrium is attained in an economy when demand equals supply in all markets simultaneously. Reason R: In a general equilibrium model, relative prices cannot be determined. In the light of the above statements, choose the most appropriate answer from the options given below:
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General equilibrium and exchange economies has come up 69 times in 7 exams since 2004.
This question is on Walras' law, numeraire and relative prices, part of General equilibrium and exchange economies in Microeconomics.
Why one market clears automatically when the others do, and why only relative prices matter.
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Question from the CUET-PG 2023 Shift 2 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.