Question

Distinguish Between:

Partial equilibrium and General equilibrium

Answer 1

Sr. No.	Partial equilibrium	General equilibrium
1.	Partial equilibrium means an equilibrium derived by considering the effects of only two variables at a time. All other variables are considered to be constant.	General equilibrium means an equilibrium which is derived by considering the effects of many variables at a time.
2.	It neglects the interdependence between variables.	It takes into account the interdependence between variables.
3.	Micro-economic analysis is based on partial equilibrium analysis.	Macroeconomic analysis is based on general equilibrium analysis.
4.	It studies the equilibrium position of a consumer, a firm, an industry, a market etc.	It studies the equilibrium position of the economy as a whole.