Economics · Microeconomics
Which of the following statements regarding General Equilibrium Theory is INCORRECT?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Equilibrium in markets is conceptualized through the 'tâtonnement' process to discover equilibrium prices.
- 2The theory assumes adjustments occur when actual prices diverge from equilibrium, identifying conditions for equilibrium stability.
- 3French economist Piero Sraffa is credited with developing and expanding general equilibrium theory in the late 19th century.✓
- 4General Equilibrium Theory explains how supply and demand interact across multiple markets simultaneously to reach market-clearing prices.
Correct answer
French economist Piero Sraffa is credited with developing and expanding general equilibrium theory in the late 19th century.
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