Economics · Market Stability Analysis
In comparing Walrasian and Marshallian stability techniques for a single market, which of the following is ACCURATE?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Marshallian stability requires the supply curve to be upward-sloping in all cases
- 2Walrasian stability is defined by dp/dt = k·z(p) where z is excess demand; Marshallian stability is defined by dq/dt proportional to demand price minus supply price✓
- 3Walrasian stability examines quantity adjustment to price signals; Marshallian stability examines price adjustment to quantity signals
- 4Both techniques always yield the same stability conclusion for any supply-demand configuration
Correct answer
Walrasian stability is defined by dp/dt = k·z(p) where z is excess demand; Marshallian stability is defined by dq/dt proportional to demand price minus supply price
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